Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Lido sellers claimed a key price level, as bears extended their dominance.
- On-chain metrics presented mixed signals.
Lido’s [LDO] dwindling price action sunk to new lows as the price hit the $1.5 price zone. Following the deep retracement from the $2.49 resistance level, LDO has completely reversed all of its Q2 gains.
Realistic or not, here’s LDO’s market cap in BTC terms
The bearish market outlook led by Bitcoin [BTC] has also contributed to Lido’s sharp descent with shorts maximizing the selling pressure.
Bears extended dominance with the capture of critical price level
Source: LDO/USDT on Trading View
A look at the four-hour timeframe showed that the bullish defense of the $1.76 support had kept sellers away for close to a month. Despite the best efforts of the bulls, the selling pressure overwhelmed buyers leading to a collapse of the support level.
The two large drops on 15 August (7.9%) and 24 August (9.5%) could give sellers leverage to push for the January low of $1.25. On the flip side, bulls could mount another fightback, especially if BTC posts a strong bullish rebound.
Looking at the chart indicators highlighted the dominance of sellers. The Relative Strength Index (RSI) edged toward the oversold zone. The On Balance Volume’s (OBV) sharp drop and flatline movement hinted at a disinterest in accumulating LDO.
Declining Open Interest doesn’t tell the full story
Source: Coinalyze
Whenever the price is on an extended decline and the Open Interest begins to fall with the price, it indicates a very strong bearish trend. However, while the OI fell alongside the price, the spot CVD rose.
How much are 1, 10, or 100 LDO worth today?
This showed underlying demand for the asset which could fuel a rebound from the current price range. If bulls can stem the selling pressure on the higher timeframes along with a BTC reversal, the possibility of a rebound could be strengthened.
