Ethereum’s biggest Merge staker soars 400% in July — but technicals flash warning

Lido DAO (LDO) price has skyrocketed by roughly 400% month-to-date to reach $2.22 on July 28, its highest level in over two months.

LDO Mergified

LDO price has benefited majorly due to its association with Ethereum, the leading smart contract platform by total-value-locked (TVL) and market capitalization.

Notably, LDO serves as a governance token inside the Lido DAO ecosystem, a project that offers staking services for Ethereum.

$ETH move bringing the entire ecoystem with it.

Best movers:
•Layer 2: $OP $MATIC

And of course because it’s crypto $ETC is the biggest pump.

— Luke Martin (@VentureCoinist) July 27, 2022

The staking practice allows users to earn passive income without needing to sell their coins. It also helps validate transactions and secure the blockchain. In return, the protocol offers stakers rewards in the form of new tokens minted and fees collected.

Lido DAO working mechanism. Source: Official Website

Ethereum could become a full-fledged proof-of-stake blockchain by Sept. 19, the tentative date for the Merge. A successful transition to proof-of-stake could mean more demand for Lido DAO services in the future.

Lido DAO has remained the leading Ethereum staking service provider since August 2021. As of July 28, it had had put 4.14 million Ether (ETH) in the Merge’s official deposit contract Eth2 via its staking contracts.

ETH 2.0 total value staked by provider. Source: Glassnode

That somewhat explains LDO’s 140%-plus rally two weeks after the Merge’s release date announcement — from $1.29 on July 14 to $2.22 on July 28.

LDO/USD daily price chart. Source: TradingView

False breakout risks

Despite solid fundamentals, LDO’s ongoing rally risks trapping bulls, primarily due to a growing divergence between its price and momentum.

On a daily chart, LDO’s price rise accompanies a drop in its relative strength index readings, suggesting that bulls may lose their grip on the market while letting bears take over.

Same clues emerge from the ongoing divergence between the rising LDO price and its falling volumes, as shown below.

LDO/USD daily price…..


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