Lido DAO (LDO) Price Reaches Three-Week High Amid Market Recovery

Lido DAO’s price has rebounded to its three-week high of $2.21 as of May 16, up 40% when measured from its local low of $1.57, established four days ago. This impressive recovery appeared in tandem with other top-ranking crypto assets, including Bitcoin (BTC) and Ether (ETH). However, LDO has greatly outperformed the broader crypto market, which is up only 4.5% since May 12.

Factors Driving LDO’s Price Up

The LDO price recovery coincides with the net positive inflows into Ethereum’s proof-of-stake (PoS) contract in recent days. Lido DAO is primarily an Ethereum liquid staking platform. It enables users to pool their funds to become validators on Ethereum. In April, Ethereum underwent a network upgrade called Shapella, which supports reward withdrawals from its staking contract. As a result, its PoS contract witnessed days when the amount of ETH withdrawals outnumbered deposits.

Lido DAO’s nearest competitor, RocketPool (RPL), has also soared 15% to around $50 when measured from its May 12 low. Lido DAO whales have also supported LDO’s upside move in the days leading up to the Lido v2 launch. This may suggest that the “buy the rumor” scenario may have contributed to the LDO price rally.

Lido v2 Launch

On May 15, Lido DAO launched the mainnet version of “Lido v2,” which enables Ether stakers to burn their stETH and exit the protocol at a 1:1 ratio. Since the upgrade, LDO’s price has climbed 20%, or half of its 40% rebound thus far. Lido DAO did not support full ETH withdrawals. Instead, it issued staked Ether (stETH), theoretically pegged to ETH by 1:1, to users that could be exchanged freely for other crypto assets across exchanges.

Technical Analysis

From a technical standpoint, LDO’s 40% bounce started near the lower trendline of a prevailing falling wedge setup. The LDO/USD pair has recovered similarly in recent history, with each rebound taking its price to the wedge’s upper trendline. Now with the price treading around the upper trendline again, LDO could enter a breakout stage or pull back to retest the lower trendline.