Lido DAO's LDO Token Jumps 13% on $40 Million Derivatives Inflow

Lido DAO's LDO token experienced a significant price surge, jumping 13% over the past 24 hours. This price increase was driven by a substantial inflow of $40 million into the derivatives market, as indicated by Open Interest data. The total value of unsettled contracts, both long and short, within the given period, increased by over 15% to reach $266 million. This surge was primarily driven by long positions, suggesting that traders are increasingly betting on upward momentum for LDO.

Despite the bullish sentiment, there is a notable divergence in investor behavior. According to community sentiment data, 77% of investors voted in favor of a bullish move for LDO. However, on-chain data reveals that investors collectively sold $3.5 million worth of LDO in the past 24 hours, despite the bullish votes. This selling pressure has persisted for two days, with a total of approximately $4.2 million in sell-offs during this phase. This divergence suggests that spot investors may be treating the bullish sentiment as an opportunity to exit or accumulate at key levels.

The ongoing liquidity divergence leaves the direction of LDO’s next major move uncertain. An analysis of the liquidation heatmap suggests that LDO’s price may be more likely to drop than rally. There are larger clusters of unsettled liquidity below the current price than above it, which tend to act like magnets, drawing the price toward them. If LDO drops, it could fall to as low as $1.05, where a major cluster lies. Conversely, if the token rallies, the upside might be limited, with liquidity clusters above the current price extending only slightly—to around $1.27. A move toward $1.27 could quickly trigger a price reversal, setting LDO up for a notable drop in the days ahead.

In summary, while LDO has seen a significant price surge driven by derivative market funding, the selling pressure from centralized exchanges continues to grow, dampening the asset’s upside potential. The divergence between bullish votes and actual selling behavior, along with the liquidity heatmap analysis, suggests that LDO’s price may face downward pressure in the near future. Investors should closely monitor these dynamics as they navigate the market for LDO.