- Lido price has defied gravity in the past few weeks.
- It has jumped by by over 42% from its lowest level this year.
- Lido is the biggest player in liquid staking technology.
Lido price has done well in the past few days as it evolves into the biggest DeFi platform in the world. LDO soared to a high of $1.295, which was the highest point since November last year. It has spiked by over 42% from its lowest point in 2022. Other liquid staking tokens like ANKR and SSV prices have also rallied.
What is Lido and liquid staking?
Lido has emerged as the biggest player in the DeFi industry with a total value locked (TVL) of more than $5.9 billion. It is a leading player in the liquid stalking space, which has become popular among crypto investors. LDO surged as it overtook Maker to become the biggest DeFi protocol in the world.
So, what is staking? Proof-of-stake blockchains like Polkadot and Ethereum rely on validators to confirm their transactions. Some networks have less than 100 validators while bigger ones like Ethereum have thousands around the world.
Staking is the process of delegating your coins to a validator or a validator pool to help secure the network. People do that by simply depositing their coins to an exchange for a certain period. In most cases, one must stake for a month to gain these rewards.
Staking rewards come from several sources. In most cases, they come from the fees that the blockchain generates. For example, Ethereum generates more than $1.5 million on a daily basis.
Liquid staking is another approach of generating returns. It is seen as being more flexible than doing the other type of staking since users can easily withdraw their funds at any time. Users give liquid staking platform like Lido their token deposits, stakes them, and then receive a receipt that is redeemable for staked tokens. For example, when you stake EHTH, you receive stETH.
Lido has had some ups and downs recently. In May last year, it lost billions in assets when Terra and its ecosystem crashed. At the time, it held billions of Terra tokens. Most recently, it suffered as demand for Solana evaporated because of its link to FTX.
Lido price prediction
The 4H chart shows that the LDO price has made a strong rebound in the past few weeks. In this period, it has managed to move above the 38.2% Fibonacci Retracement level. It has also risen above the 25-day and 50-day moving averages and the important resistance level at $1.1660, which was the highest point on December 14.
Therefore, Lido will likely continue rising as buyers target the next key resistance point at $1.50, which is about 20% above the current level. A drop below the support at $1.166 will invalidate the bullish view.
