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Lido DAO (LDO) has experienced a strong bull run, fueled by positive market sentiment, with the token rising 33% in the past 24 hours to $1.40. Its market cap has reached $1.26 billion, and daily trading volume is over $300 million. The rally began after Bitcoin hit a new all-time high above $75,000, following Donald Trump’s U.S. election victory on Nov. 6.
Despite this surge, LDO remains down 92% from its all-time high of $18.60 in November 2021. Additionally, the Relative Strength Index (RSI) for LDO has surpassed the 80 mark, signaling that the asset may be overbought at current levels.
Rally triggered by whales
The recent rally in Lido DAO (LDO) has been largely fueled by increased activity from whale investors. On-chain data from IntoTheBlock indicates that there was a massive spike in net inflows from large holders of the token. Specifically, the net inflows of LDO for large holders surged from 645,000 tokens to an impressive 69.26 million tokens in just a single day. This is the highest level of whale inflows since May 2023, when the token was trading closer to the $2 mark.
This sharp increase in whale accumulation points to a strong demand for LDO from institutional and high-net-worth investors. Whales, who typically hold large quantities of a token, can have a significant influence on market sentiment and price movements. When they start accumulating large amounts of tokens, it often sparks FOMO (fear of missing out) among other investors, particularly retail traders. As smaller investors rush in to catch the rally, it leads to increased buying pressure, driving the price up further.
In the case of Lido DAO, this is particularly noteworthy because over 60% of its total supply is held by large whale addresses. This concentration of supply means that the price of LDO can be more susceptible to significant fluctuations when whales adjust their positions. When whales accumulate tokens, the supply on the market decreases, which can put upward pressure on the price. However, should these whales decide to take profits, the market could experience rapid price declines due to the same concentrated supply.
Moreover, the overall market-wide FOMO driven by whale accumulation could exacerbate price volatility for LDO. As more investors try to enter the market fearing they might miss out on a potential rally, the increased demand may push prices to new highs. However, this can also lead to sharp corrections when the market overheats or when whales decide to sell portions of their holdings, taking advantage of the price spike.
In summary, the dramatic price surge of LDO can be attributed to the growing interest from large holders and institutional players, with the fear of missing out (FOMO) playing a significant role in driving price action. However, this also means that LDO could experience increased price volatility in the near term, especially given the concentration of supply in whale hands. Investors should be cautious, as this volatility may continue to influence the market in both directions.
