Lido DAO has been making its investors very happy. It has been trending among the best-performing assets as of July 2022.
The token LDO, mirroring the sentiment of the market, has been performing extremely well in the market.
However, the question in the play revolves around the impact of this sentiment on the network and token.
Lido DAO skyrockets
The native token of the liquid staking protocol, LDO, had a rather phenomenal week. The token registered a 205.44% rally, with almost 26% of it coming in the last 24 hours of press time alone.
Additionally, LDO has been one of the only few cryptocurrencies to recover its June losses.
In fact, the month-to-date rally of 324% also helped the altcoin invalidate almost all the decline it noted after the May crash.
It is here to be noted that LDO had a lot of investors suffering losses.
Furthermore, as per last month’s reporting of the same, over 91.4% of LDO holders were in losses. However, at the time of writing, about 22% of them had returned to the state of profit.
The curious case of selling LDO
Naturally, those who were only witnessing recovery are going to make sure they don’t lose their profits again.
This drove investors’ confidence and motivated them to sell the token.
This can also be substantiated upon looking at the on-chain data of the last 24 hours. Approximately 10.9 million LDO worth $19.62 million or more were sold off by investors.
Well, this was bound to happen sooner or later- for the first time in the history of LDO, over $24 million worth of LDO across the network has been in profit.
This value has been determined by the total movement of the LDO tokens and the difference in price between their purchase cost and current value.
Additionally, while a lot of the investors sold, many others also moved around the supply that they held. Thus, resulting in a 176% rise in the rate at which LDO changed hands.
Such high velocity verifies that although a portion of LDO HODLers sold their holdings, many others held on to support the active rally.
Since the altcoin has already reclaimed the 50-day (blue) Simple Moving Average (SMA) and the 100-day SMA (red) as support, it might be able to rally ahead of $2 (ref. Lido DAO price action image).
The recent selling will have no significant impact on the price action either, provided investors do not repeat this instance anytime soon.
MANA’s network activity could bring forth a shorting opportunity here
Every once in a while, cryptocurrencies go through a phase where volumes contract and prices are restricted within a narrow range. Well, MANA has been stuck in this phase since June. As a consequence, it has struggled to exit its bottom range.
The altcoin has experienced very low whale and institutional activity during the contraction phase. This is often the case when cryptocurrency volumes shrink, and it is a key reason why price movements are quite limited.
MANA’s muted performance was also exasperated by its native platform’s performance. Its transaction volumes dropped substantially in the last four weeks, peaking at 59.57 million on 27 July.
In contrast, it registered its lowest 4-week transaction volume at 3.24 million on 13 August.
The low network activity also reflected in the form of a drop in active addresses.
The latter peaked at 2,611 active addresses on 21 July and dropped to as low as 854 active addresses on 13 August.
Decentraland has been hard at work trying to boost engagement within its network.
The drop in network activity highlighted the need to boost its attractiveness as a metaverse project. Despite its shortfalls, Decentraland’s market cap is currently above $2 billion.
Quite a number of MANA investors are still holding on to their coins. The 180-day mean dollar invested age achieved steady growth in the last four weeks, peaking at 977.23.
There was some profit taking towards the end of June, leading to a drop in the 180-day mean coin age. However, its recovery to its press time level at 72.25 confirms that retail investors have been accumulating, and HODLing.
Why are these observations important?
It is normal for a cryptocurrency to have low volumes when network growth and organic demand are negatively affected.
That may explain the low whales and institutional demand in the last four weeks. However, most of the top coins by market cap have already experienced substantial upside, and no longer have maximum growth potential.
This means MANA will soon end up on the radar of whales and institutions looking for the next best opportunity.
Well, the token is still relatively closer to its bottom than most top coins courtesy of its limited upside.
This means it has a higher growth potential to tap into. Its 90-day MVRV ratio, at press time, was at 14.22% which means some MANA holders who bought at the bottom are already in profit.
However, the numbers are still low compared to some of the best-performing top cryptocurrencies in the last month.
MANA’s heavily discounted price is still a healthy opportunity for long-term holders since metaverse development is still in its early stages.
Ethereum’s metrics that could determine your portfolio value this week
It is not usual for the crypto markets to be dominated by an altcoin. But this seems to be the crypto climate at the moment with Ethereum tearing it apart on the price charts.
The number one altcoin has racked up a slow day in the office but still managed over 12% of profits over the week. On top of that, the 30-day gains have crossed more than 60% for ETH as things stand.
Well, undeniably, the $2K breakout this week raised many eyebrows in the crypto community after the final testnet was accomplished.
The beginning edges closer
However, the ETH storm has calmed down. And, at press time, ETH was hovering below the $2k resistance.
Notably, this has not stopped the social channels from being flooded with talks about Ethereum and especially the Merge.
According to Lunar Crush, Ethereum topped the social activity charts among top cryptocurrencies.
The rapid surge in social activity is visible in the social volume metric of Ethereum. As per the chart below, we can see how Ethereum has regularly maintained a high index value in the past few weeks.
Meanwhile, the interest in the Proof-of-Stake transition continues to attract investors.
According to the analytic firm Glassnode, the total value in the ETH 2.0 contracts reached an all-time high of 13,302,229 ETH on 14 August. This echoes the increasing confidence of the crypto community in Ethereum’s most high-profile upgrade of all time.
Glassnode also claimed that profitability on ETH trading has increased of late.
This is of no surprise since the prices have been on a swing as they rebounded from June’s bottom.
In fact, the MVRV (1d MA) reached a 3-month high of 1.226 on 14 August with the previous similar high observed at 1.225 on 13 August.
Not all is changing
That being said, a group of Ethereum miners will continue to run on the proof of work mechanism. As per IntoTheBlock, the implied valuation of ETHPow at a price of $114 is well over $10 billion.
This group is bound to face some challenges as Chainlink oracles and Circle’s USDC has vowed to support ETHPoW.
However, they have convinced exchanges such as Huobi, Poloniex, and BitMEX to support their ETHPoW token- which is expected to be 6% of the ETH’s value.
ETH looks set to consolidate near the $2,000 resistance at least until the Merge.
Undeniably, it will be under the monitor of the majority of crypto analysts because of the magnitude of the changes promised.
‘Exhausted’ AVAX may not follow the general trend; Instead, here’s what’s up
The first half of August brought good tidings for AVAX holders, as has been the case for most cryptocurrencies. However, the market is now about to enter the second half of the month, with AVAX already showing signs of a potential pullback.
AVAX’s bulls demonstrated strong momentum in the first week of August. However, the second week just concluded with a notable decline in momentum. Any upside over the last few days was also met with some resistance, especially near the $30-price range.
AVAX’s latest performance is not surprising. Especially since this is because the resistance level seemed to be manifesting after it recently retested its ascending support line.
The latter is part of the ascending channel in which AVAX has been trading, after bottoming out near mid-June.
The trend line is not the only sign of a potential retracement. It also turns out that AVAX’s rally briefly pushed it into overbought territory, according to the RSI. In fact, it has been hovering near the overbought zone since, with the bulls attempting to push up further.
These bearish expectations can be backed by a drop in volume ever since AVAX entered its press time resistance zone. This observation seemed to align with the weaker bullish momentum seen over the aforementioned period.
In addition, investor sentiment registered a notable change this past week. This change was picked up by the FTX funding rate, which dropped substantially after hitting a monthly peak last week. This confirmed that investors in the derivatives market are currently less optimistic about the bulls.
AVAX’s weighted sentiment has also dropped slightly since 9 August. A confirmation that the sentiment is no longer predominantly bullish. In fact, at press time, it was in the negative zone, confirming that many investors expect a reversal.
Exploring all possible outcomes?
If the market can maintain its upside, chances are that AVAX might retain its press time range. However, the prevailing sentiment means it might not manage more upside without encountering significant sell pressure.
On the other hand, this is the third time that AVAX is retesting the resistance line. This is confirmation that the press time northbound price channel is growing stronger. In other words, investors should watch out for a potential breakout, especially if the next bullish wave returns with more momentum.
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