25 May 2024
Lido (LDO), the liquid staking protocol for the Ethereum (ETH) and Polygon (MATIC) blockchains, has seen a significant price spike in the last 24 hours following the long-awaited approval of spot Ethereum ETF applications by the US Securities and Exchange Commission (SEC) on Thursday.
The protocol’s native token, LDO, has successfully regained the $2.30 level and is looking to break out of its one-month downtrend structure that has been in place since the market correction in April.
LSD Sector Set To Soar With Ethereum ETF Approval?
As reported by our sister website, Bitcoinist, the SEC’s approval of the Ethereum ETFs was detailed in an official filing, highlighting that the proposals meet the provisions of the Exchange Act and relevant regulations governing national securities exchanges.
The Commission has determined that proposals from notable entities such as BlackRock, Grayscale, Bitwise, VanEck, Ark Invest/21Shares, Invesco Galaxy, Fidelity, and Franklin Templeton fulfill the requirements to prevent fraud and manipulation, protect investors, and safeguard the public interest.
Crypto analyst Daan Crypto Trades, commenting on the Ethereum ETF approval on X (formerly Twitter), pointed out that the new index funds approval has led to two sectors emerging as clear winners.
One of these sectors is Liquid Staking Derivatives (LSD) coins, with Lido at the forefront. Lido provides staking support for the Ethereum blockchain without the need to lock tokens or maintain infrastructure, allowing participants to engage in on-chain activities such as lending and farming.
Key Levels To Watch For Lido
During the early hours of Friday, LDO reached a peak of $2.49 but has since retraced to its current trading price of $2.35. Large investors are interested in the token, as Spot On Chain data reveals that six fresh wallets/whales withdrew 4.3 million LDO ($9.59 million) from crypto exchange Binance over the past 24 hours.
This indicates a growing interest in holding the token, as sentiment suggests a potential increase in price parallel to Ethereum once the newly approved index funds for the second-largest cryptocurrency enter the market in the coming months.
Moreover, CoinGecko data shows that Lido has experienced a trading volume of $350 million within the last 24 hours, marking a 78.60% increase compared to Thursday’s. However, the token remains 68% below its all-time high (ATH) of $7.30, achieved during the 2021 bull market.
Looking ahead, bullish investors should closely observe the next resistance level on the LDO/USD daily chart, situated at $2.55. Breaking this level is crucial for breaking the downtrend structure that has persisted over the past month, potentially leading to retests at $2.70 and $2.90.
Conversely, the $2.21 zone serves as a significant support level, as it acted as a strong barrier for Lido in the past week and a half before the breakout.
Featured image from Shutterstock, chart from TradingView.com