Key Takeaways
LIDO surged 21.53% hitting $1.15, then retraced to $1.13. Buyers rushed into the market following Blackrock’s filing for ETHA staking, scooping up over 60 million tokens.
Lido [LDO] rallied 21.53% reaching a 2-month high of $1.15 before slightly retracing to $1.13 by press time.
As a result, the altcoin’s market cap reclaimed $1 billion mark for the first time in two months. At the same time, its trading volume surged 219.9% to $471 million, reflecting growing demand and network activity.
But what triggered the surge?
BlackRock ETHA staking triggers LDO rally
According to AMBCrypto, the price uptick is in part driven by BlackRock’s recent filing to add staking to its Ethereum ETF [ETHA].
This move is significant for Lido because staking mainly happens through LDO. Thus, all ETH staking processes will run through LDO, something that most market participants have interpreted as a bullish signal.
Significantly, this move to stake ETH through a third party could boost demand for Lido’s stETH derivatives, thus enhancing POS.
Demand for Lido soars
Following BlackRock’s filing, investors rushed into the market to accumulate the altcoin.
According to Coinalyze, Lido Dao saw 48.6 million in Buy Volume compared to 45.7 million in Sell Volume on July 17th.
At the time of writing, the altcoin recorded 15.3 million in Buy Volume relative to 13.4 million in Sell Volume.
As a result, the altcoin experienced two consecutive days of positive Buy-Sell Delta, at 2.8 and 1.8 million, respectively.
Typically, a higher buy volume indicates strong market conviction as investors shift to aggressive accumulation.
Profit takers creep in
Unsurprisingly, as LDO prices rallied, so did the profit-taking urge by holders and investors in equal measures.
Spot Netflow hiked to a 6-month high of $5.2 million before dropping to $2.77 million as of this writing.
Source: CoinGlass
A high Netflow implies increased Exchange Inflow compared to Outflow, a clear sign of aggressive selling.
For that reason, Lido Finance’s scarcity has been evidenced by the declining Stock-to-Flow Ratio.
According to Santiment, SFR declined to 26.4, reflecting an increase in LDO available for immediate sale on Exchanges.
Source: Santiment
Typically, a lower scarcity precedes lower prices amid mounting downward pressure on an asset.
Can LDO bulls repel bears?
According to AMBCrypto’s analysis, Lido saw a strong uptrend as buyers rushed into the market following good news.
As a result, the altcoin’s Relative Strength Index (RSI) surged to 78, at press time, touching overbought territory.
At the same time, DMI spiked to 41, indicating strong upward momentum and its potential for continuation.
Source: TradingView
When these momentum indicators are configured in this manner, they suggest that Lido may continue to make gains.
That said, if buyers can hold on and continue accumulating, LDO could target $1.4. However, profit takers pose a threat to the continued uptrend, and if they overwhelm buyers, a pullback is likely to follow.
If LDO faces rejection here, the altcoin will find support around $0.97.
