Since Aug. 14, LDO has lost more than 45% of its value, raising concerns about the likely continuation of the previous 340% surge. Such rapid rise was caused by a forthcoming Merge upgrade on Ethereum in favor of Lido DAO.
On August 26, LDO went below the 50-day moving average, which was a concerning indication for investors because it might have signaled the start of a major reversal rally for LDO, potentially returning to pre-bullrun levels.
Fortunately, LDO is showing some strength today with an 8% price gain, which has moved the token above a key resistance level and qualified it for another price increase. Other indicators, such as the Relative Strength Index, are in neutral territory, indicating that there is room for a new rally and acceleration.
The fundamental factors behind growth
While there are no notable events that would drive LDO’s value higher in the present market, the next Merge upgrade could refuel LDO’s growth, as the decentralized organization is one of the largest holders of Ethereum 2.0 staking contracts.
With the ultimate migration to the new network, LDO will become one of the largest “shareholders” of PoS-era Ethereum, explaining why more individuals are eager to join a DAO with one of the most powerful voting abilities on the market.
At press time, Lido DAO’s daily gain has accelerated to 12%, and the token is now trading above the $2 mark with a significant increase in trading volume, indicating that the surge will continue.