Cryptocurrency markets have been grappling with a sense of fear for a while, as we have also reported on Kriptokoin.com. Besides, as the markets try to recover, an altcoin has surged nearly 200 percent over the past seven days, making it the most profitable crypto among the top 100 cryptocurrencies by market cap. So what is behind this growth and huge rise? Here are the details…
This altcoin made a huge splash
Lido DAO (LDO) has added nearly 200 percent to its value over the past seven days, making it the most profitable altcoin among the top 100 cryptocurrencies by market cap. The main reason behind the growth is thought to be the launch of Ethereum 2.0 and the benefits Lido will derive from it. In recent announcements, Ethereum (ETH) developers announced that the Merge update is expected on September 19. Lido, which has 4.1 million ETH locked in a staking contract, has resulted in an LDO increase of approximately 25 percent on the date of the announcement as it serves as a governance token.
In addition to the increased price, the number of Ethereum deposited into the staking contract through the Lido platform has risen substantially. The main reason for this is mostly due to the fact that investors know the exact date of the upcoming release. Besides, this rise is actually not good enough for LDO. Because even a price increase of about 200 percent is not enough to cover the losses LDO has experienced this year. Since reaching its local peak in April, LDO has lost 66 percent of its value. At the beginning of July, LDO had dropped by almost 90 percent, making it one of the worst performing tokens out of the top 100 cryptocurrencies by market cap.
Will the rally continue?
As of now, LDO continues to be heavily underbought. Also, the altcoin could face a correction in the coming days or even hours as the buying volume remains at a relatively low level, which may not be enough to support the continuation of the current rally.
Following the announcement of Ethereum (ETH), it is quite significant that the number of ETH deposited in Merge’s smart contracts through the Lido DAO has increased. As Lido is currently the largest provider by total stake, a successful merger launch could bring more users to Lido, which could increase demand for LDO tokens, facilitating its price spike. Therefore, a technical correction in LDO price could follow with a 100-day EMA recovery if Ethereum’s plans to become a proof-of-participation chain come in time.
