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Lido Finance: LDO’s reaction to whale accumulation calls for vigilance because…

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  • Ethereum whales lit up interest in LDO as the token price increased
  • The on-chain performance of Lido showed some shortfall. Hence, there might be a need for caution

Lido Finance [LDO] garnered a 7.88% price increase in the last 24 hours following Ethereum [ETH] whales’ interest in the token. According to WhaleStats, LDO was one of the smart contract tokens mostly used by the top 5000 investors in this group within the same period.

This action implied increased buying activity and movement for the liquid-staking solution utility token.

Read Lido DAO’s [LDO] price prediction 2023-2024

However, the increase in value might not be enough to conclude that LDO reacted positively to the development. For short-term profit enthusiasts, that might be enough. Yet, the on-chain condition of LDO revealed contrasting perspectives. 

Excitement should not eradicate oversight

There were reasons to remain vigilant because Santiment showed that the price rise rarely impacted the gains recorded. This was the case, especially for long-term holders of the token, let out by the Market Value to Realized Value (MVRV) ratio.

According to the on-chain portal, the seven-day to 365-day MVRV ratio maintained negative values all round. At press time, the seven-day MVRV ratio was -9.859% and the 365-day ratio was -37.80%.

Lido Finance [LDO] price and MVRV ratio

Source: Santiment

Thus, the average purchasing value of LDO was worth more than the current price. Therefore, investors had hardly made profits, and they were not willing to sell yet. In addition, it was unlikely that there would be a market correction since LDO could be considered undervalued.

Despite the inconsistency shown by LDO, the average investor remained zealous. This was because the positive sentiment attributed to LDO was 0.541, at the time of writing. Based on Santiment’s data, the negative sentiment was 0.459.

However, since the values were close, and the positive sentiment could not dominate with a 0.75 value, it meant that a large part of LDO investors still exercised caution.

LDO positive and negative sentiment

Source: Santiment

Lido Finance: On the social front

Lido’s social metrics remained “bland and bad” at 0.009%, according to Santiment. This meant that arbitrary search and discussions for LDO were at an extremely low point. Additionally, this condition meant that LDO hardly got any hype even after the price hike and could possibly send the uptrend in the opposite direction. 

Its social volume was also full of blemish as Santiment showed that it was at a value of 1. This implied that community discussion about LDO was not significant to trigger the price to the top. Hence, LDO had the prospect of losing the upturn recently registered.

Lido Finance social dominance and social volume

Source: Santiment

 

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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