Over the past year, Lido [LDO] has experienced a downward trend, resulting in a 35% decrease year-to-date. This negative momentum has persisted in shorter time frames, as LDO fell by 3.3% in the last 24 hours, dropping below the critical psychological threshold of $1.
At present, LDO is being traded at $0.9919, showcasing a notable decline from its peak of $1.03 within 24 hours. Despite this prolonged bearish performance, certain analysts are optimistic about a potential turnaround in the near future.
Potential Bullish Reversal for Lido
An analysis recently conducted by CryptoBullet on X suggests that LDO might be poised for a multi-month uptrend. As per the analysis, LDO’s weekly chart displays an attractive Leading Diagonal pattern, hinting that now could be an ideal time to invest in the asset.
The analyst remarked:
“I find this chart compelling. With a beautiful Leading Diagonal formation, now could be the opportune moment to purchase LDO in my opinion. I anticipate a sustained rally over several months.”
CryptoBullet has outlined three price targets for the potential rally: $8.8, $16.6 (the primary target), and $36.9 in case the bullish momentum strengthens. While this forecast appears promising, a deeper analysis of LDO’s fundamental metrics is necessary to gauge the likelihood of such a surge.
Analysis of Active Addresses and Open Interest
An evaluation of LDO’s fundamentals offers insights into the current state of the asset. One crucial metric to consider is retail interest, reflected in the number of active addresses engaging with the network.
Statistics from Santiment exhibit a continuous decrease in LDO’s active addresses since reaching a peak of over 7,500 in April. The most recent figures indicate that this metric now stands at 4,211, signifying an almost 5% reduction from the 5,000 active addresses reported last month.
This decline in active addresses hints at dwindling retail interest in LDO, potentially impacting its price dynamics. Typically, a drop in active addresses suggests reduced network activity, potentially signaling a lack of participation or confidence among retail investors.
This decline might exert additional downward pressure on LDO’s price in the short term, posing a challenge for the asset to break free from its existing bearish trend.
Nevertheless, if the predicted rally comes to fruition and market sentiment shifts, a surge in active addresses might emerge, indicating a renewed interest from investors.
In addition to retail engagement, analyzing open interest offers a broader perspective on the positions held by market participants in LDO.
Data from Coinglass indicates that LDO’s open interest has decreased by 3.95% to the current valuation of $49.95 million. Conversely, the volume of open interest in the asset has witnessed a substantial increase, rising by 68.91% to $63.21 million.
Price Outlook
This disparity in open interest metrics suggests that while the total value of active contracts has declined, the number of contracts being traded has surged.
This scenario could indicate escalated speculative activity, where traders are enlarging their positions in anticipation of an impending price shift.
The upsurge in open interest volume, notwithstanding the overall decrease in open interest valuation, could imply that traders are gearing up for a potential market transition.
If CryptoBullet’s optimistic projection materializes, this heightened trading activity might offer the required momentum for LDO to reverse its current downward trajectory.