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Attention LDO holders! Now might be the time to rethink your trading strategy

Attention LDO holders! Now might be the time to rethink your trading strategy
  • LDO’s value rallied by over 75% within the final week
  • As traders search out revenue, the bears is likely to be preparing for a re-entry.

Lido Finance’s governance token LDO, noticed a major enhance in value of 78% previously week. This made LDO one of many top-performing cryptocurrency belongings by way of beneficial properties over the previous seven days, based on information from CoinMarketCap.

Nonetheless on an uptrend at press time, LDO’s value was up by 29% within the final 24 hours. In the identical time interval, LDO tokens price $274 million had been traded. This led to a major enhance within the each day buying and selling quantity of over 500%

Learn Lido Finance’s [LDO] Worth Prediction 2023-24

With the Market Worth to Realized Worth (MVRV) ratio of 150.51% at press time, LDO was overvalued. Its market worth (the present value which was $1.91) was considerably increased than the realized worth (the value at which the asset was just lately purchased and offered).

This indicated that traders that distributed their LDO holdings because the 12 months started realized double the revenue on their investments.

Supply: Santiment

However for the way lengthy will this proceed?

A disadvantage within the works?

An evaluation of LDO’s efficiency on a each day chart confirmed that bears is likely to be getting ready to re-enter the market. This might result in a possible lower within the value of LDO.

Over the past 9 days, key momentum indicators rose steadily to relaxation at overbought highs at press time. LDO’s Relative Power Index (RSI) and Cash Circulate Index (MFI) had been noticed at 77.96 and 93.37 at press time. 

When an asset’s RSI and MFI lie within the overbought area, the asset’s value has been rising for an prolonged time period. Because of this, it could be overextended, probably indicating {that a} value correction or reversal is imminent.

At overbought highs, consumers out there are sometimes exhausted and are unable to provoke any additional value rally. Therefore, a disadvantage in LDO’s value is likely to be on the horizon within the coming days.

Additional, regardless of the value rally within the final week,  LDO’s Chaikin Cash Circulate (CMF) was seen on a downtrend since 6 January. This might thus, create a bearish divergence.

What number of LDOs are you able to get for $1?

If an asset’s value rises however the CMF drops, it may point out a bearish divergence between the asset’s value and the underlying shopping for and promoting strain. This divergence signifies that the asset’s value might not be sustained, and a value reversal or correction could possibly be imminent.

Lastly, LDO’s value was considerably unstable at press time. The narrowness of the hole between the higher and decrease bands of alt’s Bollinger Bands revealed this. 

When the value of a cryptocurrency is extremely unstable, it signifies that it’s liable to speedy and important value fluctuations. Therefore, warning is suggested. 

Supply: LDO/USDT on TradingView

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