February 4, 2023

  • Lido Finance saw the popularity of its staking platform drop in November.
  • However, the money flow of LDO has registered some upside in recent days despite the downtrend.

LDO fans are in for a treat after Lido Finance’s latest analysis update. The staking platform revealed that it saw an increase in staking deposits on multiple chains that support its business.

Read Lido DAOs [LDO] Price forecast 2023-2024

Lido Finance saw the popularity of its staking platform plummet in November during and after the collapse of FTX.

The LDO token then faced less demand and saw more downsides as a result. The number of active addresses with the token then dropped from the second week of November to the end of the month. Similarly, the supply of the top 1% of addresses registered a significant outflow.

Lido active addresses and offer of top 1% addresses

Source: Glassnode

At the time of writing, the active addresses were still low, but the supply of the top 1% of the addresses showed a slight increase. This was not the only benefit registered in recent days. Lido’s latest data showed that wagering deposits have increased significantly since the end of November.

You may be wondering why these observations are important? Well, because a return of investor interest means the staking platform can now get back on the fast track.

This could theoretically translate into more demand for the LDO token. The latter has been in a strong downtrend since mid-August and has yet to show a significant recovery from November’s bearish performance.

LDO’s $1.05 press time represented a 12% retracement over the past five days. This means that it has continued to look more and more downwards, despite Lido strike demand recovering.

Lido LDO price action

Source: TradingView

The money flow of LDO has registered some upward momentum in recent days despite the downward trend. This may be an indication of demand recovery and accumulation. Enough accumulation will eventually lead to a bullish pivot and it could happen any time from now on.

Expectations of a bullish pivot are further supported by a slight increase in LDO’s weighted sentiment. This indicates that the number of analysts and traders with a bullish bias/expectation has increased.

Lido LDO weighted sentiment

Source: Sentiment

Nevertheless, this upside is minimal, so not an indication of a strong incoming bullish wave. One possible reason for this is that Lido’s network growth is still low, despite the positive signals and the resurgence of Lido strike demand.

Lido network growth

Source: Sentiment

Nevertheless, the network growth metric has been fluctuating within the same lowest range since late November.

Judging from the above observations, the increasing demand for Lido staking is a positive sign for LDO’s performance for the rest of 2022. LDO still has the potential for a year-end rally, especially if the rest of the market adopts favorable sentiment.

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