With the Ethereum Merge just a few weeks away, happenings around the number one protocol facilitating the staking of ETH – Lido Finance – have become more interesting. Data from Santiment revealed that over the last few months, Lido’s native token, LDO, exhibited divergences in some of its on-chain metrics.
In fact, according to Santiment, these divergences are signs that buyers have slowed token accumulation.
L for Lido?
Santiment, in its latest report, highlighted that since around 2 August, LDO has exhibited a divergence between its price/volume. A divergence between these two on-chain metrics occurs when the price of a token rises and instead of a corresponding rally in trading activity, the token’s trading volume continues to drop.
The price of LDO has grown by 27% since the aforementioned date. On the other hand, its trading volume has declined by 8%.
Another divergence spotted on-chain was LDO’s price/transaction volume divergence. Santiment also revealed that while the price per LDO grew by over 213% since mid-July, the aggregate amount of LDO tokens involved in all transactions executed between then and press time dropped by 82%.
This highlighted buyer exhaustion, with the same not exactly a sign of a healthy market.
Furthermore, the social coloration enjoyed by LDO, one that saw its price rally by over 400%, has started to wane. According to Santiment, since 25 July, as the price of the altcoin grew, its social volume continued to drop with each spike in price. It argued,
“… this suggests that the excitement around LDO is dwindling, which usually translates to less new buyers to join in the fun.”
Additionally, LDO highlighted a divergence between its price and its Age Consumed. A token’s “Age Consumed” is the amount of tokens changing addresses on a certain date, multiplied by the time since they last moved.
Usually, a spike in this metric indicates that previously idle tokens are starting to change addresses and can be a precursor to a price rally. However, the reverse has been the case for LDO since 20 July. At press time, while the price was up by 86% since then, Age Consumed declined by 98%.
Finally, addresses holding between 10,000 to 100,000 LDOs have reduced their holdings gradually since 22 July.