Key Takeaways
LDO surged 17% amid strong buying, whale activity, and rising futures interest. However, profit-taking and short positions threaten gains, with potential pullback to $0.891 if selling intensifies.
Lido DAO [LDO] soared 17.69% hitting a local high of $1.119 before slightly retracing to $1.110, at press time.
This price uptick was backed by a 232% jump in volume, reaching $225 million, signaling increased on-chain activity.
At the same time, the altcoin’s market cap surged 16.27% to $987 million, reflecting increased capital inflow.
But what’s behind the recent upsurge
LDO buyers make a comeback
Significantly, when LDO reached a local bottom a week ago, investors rushed to buy the dip. According to Coinalyze, LDO has recorded positive Buy Sell Delta for five consecutive days.
In fact, at the time of writing, LDO saw 6.32 million in Buy Volume compared to 5.6 million in sell volume. For that reason, the altcoin saw a positive market delta of 721K, a clear sign of aggressive spot accumulation.
Source: Coinalyze
Typically, when an asset records sustained buying pressure, it leads to higher prices, which explains recent LDO gains.
Whales flock into Futures but..
After staying on the sidelines through July, LDO whales re-entered the market as prices dropped to a local low of $0.85 last week.
This dip likely prompted them to buy in and prepare for the next price move.
Data from CryptoQuant showed that Lido DAO’s Futures Average Order Size has consistently reflected large whale trades over the past week, indicating strong market involvement from major players.
Source: CryptoQuant
In this case, they are either taking long or short positions. According to CoinGlass, Lido Dao’s Open Interest (OI) jumped 32.2% to $225 million while Derivatives Volume soared 199% to $537.8 million.
When OI and Volume surge in tandem, it reflects increased participation in the futures and higher capital inflow.
Source: CoinGlass
Surprisingly, despite rising participation, the altcoin’s Long Short Ratio failed to flip one and sat around 0.9569, at press time.
When this ratio holds below 1, it suggests a higher demand for short positions compared to longs.
Source: CoinGlass
Short positions accounted for 53% while longs accounted for 46.9% of the total Futures accounts. Based on this, we can conclude that these whales rushed into the market to take short positions.
Profit takers jump to spoil the party
Unsurprisingly, as prices jumped from the recent dip, investors decided to realize profit. According to CoinGlass, LDO’s Spot Netflow turned positive and has held within this territory for the past 4 days.
On the 8th of August, LDO’s Netflow surged to a 3-week high of $3.36 million. Such a massive uptick in Netflow suggests that exchanges recorded a high inflow volume relative to outflows.
Source: CoinGlass
Typically, a higher inflow implies that holders are aggressively selling. Historically, increased profit taking has preceded lower prices as downward pressure on an asset mounts.
Can LDO bulls hold on?
According to AMBCrypto’s analysis, the token soared as buyers, both retail and whales, rushed into the market to buy the dip.
As a result, the altcoin’s Relative Strength Index (RSI) made a bullish crossover, reaching 60 at press time. At the same time, LDO flipped long-term MA for the first time in ten days, signaling strong upward momentum.
Source: Tradingview
When these indicators are in such a manner, they signal a potential for the current trend to continue.
Therefore, if buyers can hold at the current speed, Lido Dao could reclaim $1.17 and target $1.27 resistance.
However, as profit takers become aggressive, they pose a significant threat to recent gains. If selling pressure continues to rise, LDO could pull back to the short-term 50MA at $0.891.
