Lido [LDO] hit a key stiff resistance level, can shorting yield gains
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- The RSI headed to the overbought zone, making LDO bullish and ripe for reversal.
- Significant whale activity could tip the scale for bulls.
Lido [LDO] registered an impressive daily and weekly performance. In the past 24 hours, it appreciated 15% and traded at $2.7 at the time of writing. On the weekly front, LDO rallied 14%, according to CoinMarketCap.
However, at press time, the price action hit a key stiff resistance level at $2.8, which could slow down the uptrend or inflict a reversal should more sellers lock gains at the level.
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Will the $2.8 obstacle attract sellers?
Since mid-January, LDO has been fluctuating in the $2 – $3.2 range. Toward the end of March, LDO retested the $2 and saw increased demand at this level.
A pullback retest saw it clear the $2.229 and $2.5 obstacles. The strong rally could also be attributed to a bullish Bitcoin [BTC], which made new highs in the past few days.
At press time, BTC was constricted to $26.9K – $28.8K, which could delay LDO from overcoming the $2.8 barrier convincingly. As such, sellers could gain market entry and sink the value.
The immediate short-selling targets would be $2.5, $2.3, and $2.2. An extensive downward pressure could set LDO to retest the previous support of $2.
On the other hand, bulls could gain more leverage if there is a convincing session close above the $2.8 level. Such an upswing, especially if BTC breaks above its range, could set LDO to retest the overhead resistance level at $3.26.
At the time of writing, the RSI (Relative Strength Index) was above 50, indicating a bullish LDO. But the RSI was inching closer to the overbought zone, which could make it ripe for a price reversal. Similarly, the OBV (On Balance Volume) showed an uptick, indicating increased demand for LDO in the past two days.
LDO saw significant whale activity
There was significant whale activity transacting above $1 million worth of LDO on 4 April. Increased upward pressure on LDO’s price followed, alongside a subsequent breach of the $2.5 resistance.
Similarly, the mean coin age and supply outside exchanges increased in the past few days, reinforcing the intense accumulation phase.
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At press time, there was another whale activity recorded. A look at on-chain metrics revealed the selling pressure was coming from the 100K – 1M LDO holders’ category as the rest of the whales accumulated.
In conclusion, the stiff resistance at $2.8 could slow the uptrend, but significant whale activity could boost the surge if BTC reclaims the $29K. As such, investors should track BTC price action closely.