Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Lido sellers claimed an important price point as bears extended their dominance.
- Statistics on the chain presented mixed signals.
Lidos [LDO] The waning price action dropped to new lows as the price reached the $1.5 price zone. After the deep retracement from the USD 2.49 resistance level, LDO completely reversed all gains made in the second quarter.
Realistic or not, here is the market cap of LDO in BTC terms
The bearish market outlook led by Bitcoin [BTC] also contributed to Lido’s sharp decline with shorts maximizing selling pressure.
Bears extended their dominance by capturing the critical price point
Source: LDO/USDT on Trading View
A look at the four-hour time frame showed that the bullish defense of the $1.76 support had kept sellers at bay for nearly a month. Despite the bulls’ best efforts, selling pressure overwhelmed buyers, leading to a collapse in support levels.
The two big drops on August 15 (7.9%) and August 24 (9.5%) could give sellers leverage to go to the January low of $1.25. On the other hand, bulls may enter a fight again, especially if BTC posts a strong bullish rebound.
Looking at the chart indicators, the dominance of sellers was highlighted. The Relative Strength Index (RSI) moved towards the oversold zone. The sharp decline and flat movement of the On Balance Volume (OBV) indicated a disinterest in accumulating LDO.
Diminishing open interest does not tell the full story
Source: Coinalysis
When the price falls for a long period of time and the Open Interest starts falling with the price, it indicates a very strong bearish trend. However, while OI fell in line with price, spot CVD rose.
How much are 1, 10 or 100 LDO worth today?
This showed that underlying demand for the asset could drive a recovery from the current price range. If bulls can counter selling pressure on the higher terms along with a BTC reversal, the possibility of a recovery could be bolstered.