Lido Finance (LDO) Is Down 18% In 7 Days, Time To Buy The Dip?

Jake Simmons

2 years ago

2 mins read

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With the upcoming Ethereum Shanghai hard fork in April, which will allow ETH to be withdrawn from the deposit contract for the first time in over two years, Lido Finance (LDO) has been singled out by many experts as one of the biggest beneficiaries of the upgrade. The liquid staking protocol has the largest market share among all providers.

Rumor Sends LDO Price Down South

For now, however, a rumor has massively hurt LDO’s price. As claimed by David Hoffmann, host of the popular crypto podcast Bankless, numerous DeFi platforms reportedly received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) last week. Such is considered a notice of impending criminal proceedings by the U.S. financial regulator.

Hoffman named decentralized staking provider Lido Finance as the recipient of a Wells Notice in the most recent episode of his podcast. Shortly thereafter, however, he corrected himself.

According to the statement, representatives of Lido had informed him that no such SEC warning is currently in effect. Hoffman apologized for spreading the rumor.

The podcaster justified his mistake, however, with “a miscommunication between me and a lawyer friend”. But the latter had nonetheless confirmed to him that the SEC had recently issued “at least one” written warning to a DeFi platform.

So, although the rumors about Lido were not confirmed for the time being, the price of the LDO token has plummeted 25% since last Tuesday. Over the last seven days, it’s down 18%.

Despite this, the fundamentals for Lido Finance remain very strong. According to data from IntoTheBlock, Lido Finance is the market leader in liquid staking. About 33% of all ETH staked sits on the platform. Coinbase follows Lido Finance by a wide margin. Rocket Pool is the next largest protocol for ETH staking after Coinbase and has a share of 2.3%.

In addition, Lido Finance is one of the largest DeFi projects with the highest Total Locked Value (TVL). According to DefiLlama, the platform’s TVL is currently over $9.14 billion.

Lido Finance Token – Buy The Dip?

The LDO price was as high as $3.26 on Tuesday, and on Saturday, the Lido FInance token was trading above $3.00 before plummeting to as low as $2.42 on the same day. With this and the upcoming Shanghai hard fork, a good buying opportunity for LDO has apparently arisen – if it weren’t for the rumor of possible SEC actions against staking providers.

Currently, LDO price is holding in the important support zone between $2.52 and $2.62. However, the confirmation of the rumor could massively hurt the price, and the bears could target the $1.90 level first.

In this respect, the price seems to have been deprived of momentum for the time being. Buyers have to ask themselves whether they want to take the risk of a SEC action.

Should the bulls regain the upper hand, resistance at $3.00 would be an important step to retarget last week’s local high.

Lido Finance LDO price — LDO price, 1-day chart | Source: LDOUSD on TradingView.com

Featured image from Analytic Vidhya, Chart from TradingView.com

Jake Simmons

Jake Simmons, a dedicated crypto journalist, has been passionate about Bitcoin since 2016 when he first learned about it. Through his extensive work with NewsBTC.com and Bitcoinist.com, Jake has become a trusted voice in the crypto community, guiding newcomers and seasoned enthusiasts alike towards a deeper understanding of this dynamic field.

His mission is simple yet profound: to demystify Bitcoin and cryptocurrencies and make them accessible to everyone.
With a professional career in the Bitcoin and crypto scene that began right after graduating with a degree in Information Systems in 2017, Jake has immersed himself in the industry. Jake joined the NewsBTC Group in late 2022. His educational background provides him with the technical prowess and analytical skills necessary to dissect complex topics and present them in an understandable format. Whether you are a casual reader curious about Bitcoin or an investor seeking to navigate the latest market trends, Jake’s insights offer valuable perspectives that bridge the gap between complex technology and everyday usage.

Jake is not just a reporter on technological trends; he is a firm believer in the transformative potential of Bitcoin over traditional fiat currencies. To him, the current financial system is on the brink of chaos, propelled by unchecked government actions and flawed Keynesian economic policies. Drawing from the principles of the Austrian school of economics, Jake views Bitcoin not merely as a digital asset but as a crucial step towards rectifying a failing monetary system. His libertarian views reinforce his stance that just as the church was separated from the state, so too should money be freed from governmental control.

For Jake, Bitcoin represents more than just an investment; it's a peaceful revolution. He envisions a future where Bitcoin fosters a sustainable and responsible financial framework for generations to come. His advocacy is not about opposition but about evolution, about laying the groundwork for a system that prioritizes transparency and equity over secrecy and inequality.

As a journalist, Jake’s articles are crafted with the precision of a scholar and the passion of a true believer. He provides not only news but also thoughtful analysis that connects the dots between daily developments and larger economic theories. His work is a beacon for those lost in the technical jargon often associated with crypto discussions, illuminating the practical implications and benefits of these technologies.

In summary, Jake Simmons is not just reporting on a revolution; he wants to be part of it, fully committed to enhancing public understanding and adoption of Bitcoin and cryptocurrencies. His work is more than just a collection of articles; it’s a resource, a guide, and a companion for anyone ready to explore the potential of this digital frontier. Whether you are taking your first steps into crypto or are a veteran looking to stay on top of the latest trends, Jake’s insights provide clarity and foresight in an often unpredictable industry. Join him on this journey to reshape the world of finance, one post at a time.

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