Lido price has gone parabolic as cryptocurrency prices attempt to bounce back. The token jumped to a high of $0.8813, which was the highest level since June 15th of this year. It has risen by almost 100% from its lowest level this year. This recovery gives it a market cap of more than $381 million.
Why is LDO soaring?
Lido DAO is a leading blockchain project in the decentralized finance (DeFi) industry, where it provides liquidity for staked assets. It supports key blockchains like Ethereum, Kusama, Solana, and Polkadot. At its peak, it played a major part in Terra’s ecosystem. Lido has over $5.3 billion in total staking assets while it has paid stakers over $127 million.
Lido works in a relatively unique way. It lets users stake their assets for daily staking rewards. When you stake Lido, you mint staked tokens that are pegged 1:1 to the initial stake. You can then use these staked assets in DeFi to earn returns.
Lido price has been in a strong bearish trend in the past few months. The sell-off accelerated when Terra UST lost its peg. At the time, investors in the network lost billions of dollars. Other reasons for the sell-off were the collapse of Voyager Digital and Celsius.
The situation worsened when Lido Staked Ether (stETH) lost its peg. For starters, stETH is a cryptocurrency that seeks to mimic the price of Ethereum. In May, the coin lost its peg, meaning that its holders had less value compared to the real ETH. Now, the coin is regaining its peg considering that it is trading at $1,190 while ETH is trading at $1,200.
Lido price is bouncing back as investors move to generate strong returns in the ecosystem. For example, it is possible to earn as much as 21% APR in the network. Investors believe that the recent actions to harden the network will make it safer. For example, they introduced the concept of a having a timelock between a DAO vote finalization and execution.
Lido price prediction
The daily chart shows that the Lido DAO price has been in a strong bullish trend in the past few days. Indeed, the coin has jumped in the past eight days straight. As it rose, it approached the key resistance point at $0.9455, which was the lowest level on May 26th.
Lido has jumped above the 25-day moving average while the MACD has formed a bullish divergence pattern. It has also formed a double-bottom pattern, which is usually a bullish sign.
Therefore, I suspect that the coin will keep rising as bulls target the key resistance level at $1.25, which was the lowest point in February. This price is about 64% above the current level.