Biggest Ethereum holder on network seeing inflow of funds
Given its price performance over the past few months, the Lido DAO’s recent price increase was quite unexpected. However, Ethereum’s most recent rally played out in favor of Lido Finance, which remains the largest validator on the network.
Thanks to the biggest ETH stake in the whole industry, LDO holders become beneficiaries of almost every major update on Ethereum and its positive price performance. The correlation between LDO and Ether still remains at an extremely high level, and the most recent rally is another confirmation of it.
However, given its current position in the market, Lido should not be considered a separate asset from Ethereum. Most investors choose LDOs either as a way to get exposure to staked Ethereum or as a more volatile spot asset.
However, the market analysis shows that Lido’s volatility has not been any higher than Ethereum’s, which makes exposure to Ether with the help of Lido almost pointless.
LDO Technical Analysis
Despite a near-perfect replica of Ethereum’s price performance, the difference in listing times could provide additional insight for those looking to invest in LDOs. According to the daily chart, the asset successfully broke above the local resistance level of the 50-day EMA just like Ethereum.
However, the low trading volume suggests that Lido itself is not interesting to investors, and most of the buying power appeared because of the aforementioned correlation. In the long term, LDO is moving in a downtrend despite some success it had prior to the implementation of the Merge update on the Ethereum network.
To end the year-old downtrend, Lido would need to gain a foothold above the 200-day MA resistance level, which is 25% higher than the current price.
