Lido DAO (LDO) Protects Key $1.50 Support but Bearish Pressure Increases

Key Takeaways

• Lido DAO( LDO) trades above the long-term $1.50 support.
• The LDO price is following a long-term resistance trend line.
• Will LDO break out above resistance, or will it fall below support?

Despite an impressive 350% price increase this cycle, Lido DAO did not reach a new all-time high price. The price peaked at the start of 2024, and momentum has waned since.

Even though the rest of the crypto market moved on to new highs, the LDO price has fallen over 50%.

While LDO rebounded in August, reclaiming a critical horizontal support area, the price failed to break out from its main diagonal resistance trend line.

Since the price trades between these two key levels, the question remains—will support hold, or is another breakdown imminent?

LDO Price Bounces

The weekly time frame LDO chart shows that the price has fallen under a descending resistance trend line since its cycle high of $4.03 in January 2024.

The trend line has caused numerous rejections (black icons), the most recent one last week.

Despite the trend line’s rejection, the LDO price bounced at the $1.50 horizontal support area. This is the most important horizontal level in LDO’s price history. It has provided support since 2022, except for two deviations in 2022 and 2024 (black circles).

Therefore, the trend can still be considered bullish while the LDO price trades above it. However, the trend line and support area create a descending triangle, which is considered a bearish pattern.

Like the price action, technical indicators do not provide a clear direction for the future trend. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are both neutral.

The RSI is at 50 while the MACD is close to 0, failing to confirm the trend’s direction.

It is interesting to note that while the LDO price reached its cycle high in January, the Total Value Locked (TVL) did not .

On the contrary, it was roughly $20 billion at the time and then reached its all-time high of $39 billion in March, noting a discrepancy between the price and TVL of the liquid staking solution.

This discrepancy has been ongoing since its inception in 2021. The LDO’s all-time high price of $6 was reached in 2021, a time when the TVL was only $5 billion. Since then, the price (green) has been in a gradual downtrend while the TVL has increased.

A possible reason for this is that the LDO coin supply has increased nearly four-fold since the 2021 all-time high. This made it difficult for the price to keep up with the increase in TVL.

Bearish LDO Trend

While the price action and indicator readings are indecisive, the wave count gives a bearish LDO prediction. The most likely count shows that the LDO price has completed this cycle’s A-B-C corrective structure.

This suggests that the long-term trend is bearish. The ensuing five-wave decline reinforces this belief, confirming that LDO is mired in a bearish trend.

Since August 2024, the LDO price has completed an A-B-C corrective structure, taking it to the descending resistance trend line and 0.5 Fibonacci retracement resistance level.

If the count is accurate, LDO will soon begin another downward movement, causing a breakdown from the $1.50 horizontal support area and taking it to the next support at $0.55.

Alternatively, breaking out from the descending resistance trend line will put this count in doubt since it would be a sign that the upward movement is not corrective.

However, the LDO price would have to break out above $3.50 to confirm this possibility.

New Lows Inevitable

Despite a respectable bounce since August 2024, the LDO price has failed to break out from its main resistance trend line. To the contrary, LDO has created a long-term bearish pattern and risks a breakdown from the $1.50 support area, something the wave count suggests is likely.

If that happens, the LDO price could fall nearly 70% to the next support at $0.55.