Selling the rumor? Biggest Ethereum Merge staker Lido DAO loses 40% in 30 days

Lido DAO (LDO) has declined by more than 40% in the last 30 days with more room to fall in the coming days amid a potential sell-the-news event, i.e. the Merge.

Lido DAO Ether deposits surge 160% in 2022

Lido DAO is Ethereum’s biggest staking service, having deposited over 4.14 million of the blockchain’s native asset, Ether (ETH), into the Ethereum 2.0 smart contract on behalf of its users, according to the latest data.

ETH 2.0 total value staked by provider. Source: Glassnode

In comparison, Lido DAO’s total staked amount was around 1.6 million ETH at the beginning of this year. The boom reflects a growing demand for Lido DAO services ahead of Ethereum’s scheduled transition from proof-of-work to proof-of-stake via the Merge on Sept. 15.

LDO, a governance token in the Lido DAO ecosystem, has also undergone an unprecedented price rally in recent months, up more than 350% after bottoming out at $0.39 in June.

Still, the token’s sharp correction in the past month raises the possibility of an extended downtrend now that the pre-Merge hype is nearing its end. In addition, a technical setup also alerts about a potential price decline ahe.

LDO hints at descending triangle reversal

The latest selling period in the Lido DAO market started after LDO topped at $3.10 on Aug. 13. This downtrend has painted a pattern that appears to be a descending triangle.

Descending triangles that form at the top  suggest bullish exhaustion. Theoretically, a descending triangle breakdown below the lower trendline-could crash the price to the level at length equal to the maximum triangle height.

Related: Will the Ethereum Merge crash or revive the crypto market? | Find out now on The Market Report

LDO now tests the triangle’s lower trendline area (~$1.79-$1.82) as support. The token could drop toward $1.17 if it breaks below the support level while accompanying a rise in trading volumes. In other words, a 35% drop from current price levels.

LDO/USD daily price chart featuring descending triangle breakdown setup. Source: TradingView

Conversely, a rebound from the $1.79-182 support area could have LDO test the descending triangle’s upper trendline at around $2.10 as resistance.

Also, a decisive breakout above the upper trendline would risk invalidating the bearish setup discussed above.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

All Dutch and English crypto news!

Pro-centralization Russian president grants citizenship to Edward Snowden: Report

Russian President Vladimir Putin reportedly granted citizenship to United States National Security Agency whistleblower Edward Snowden, who had been residing in the country since 2013. According...

Traders brace for Bitcoin price volatility as DXY 2022 gains near 20%

Bitcoin (BTC) volatility edged higher during Sept. 26 as the Wall Street open avoided significant losses. BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView Monthly close tipped to...

329 Japanese companies support Astar Network’s Nikkei ad

Astar Network's latest ad has gained support from over 300 Japanese companies as it looks to spearhead the growth of Japan's web3 ecosystem.   Astar Network, a...

What Cardano’s Vasil hard fork means for the blockchain

After several delays and some setbacks, Cardano's long-awaited Vasil upgrade finally went live on Sept. 22. From the outside looking in, the hard fork is...

Beste exchanges

Koop je crypto bij Bitvavo