Lido's LDO Token Surges 21.53% on BlackRock's Staking Move

Lido, a prominent decentralized finance (DeFi) protocol, experienced a significant rally, with its native token LDO surging by 21.53% to reach a two-month high of $1.15. This surge was driven by BlackRock's recent filing to add staking to its Ethereum ETF (ETHA), a move that has been interpreted as a bullish signal for Lido. The altcoin's market capitalization reclaimed the $1 billion mark for the first time in two months, reflecting growing demand and network activity.

BlackRock's decision to stake ETH through a third party is particularly significant for Lido, as staking primarily occurs through LDO. This move could potentially boost demand for Lido’s stETH derivatives, enhancing the Proof of Stake (POS) mechanism. Following the filing, investors rushed into the market to accumulate LDO, with a notable increase in buy volume compared to sell volume. This aggressive accumulation indicates strong market conviction and a positive outlook for the altcoin.

However, as LDO prices rallied, profit-taking by holders and investors became more prevalent. The Spot Netflow hiked to a six-month high before dropping, indicating increased exchange inflows compared to outflows. This trend suggests aggressive selling and a potential decline in Lido's scarcity, as evidenced by the declining Stock-to-Flow Ratio. A lower scarcity typically precedes lower prices amid mounting downward pressure on an asset.

Despite the profit-taking, Lido saw a strong uptrend as buyers continued to enter the market following the positive news. The altcoin's Relative Strength Index (RSI) surged to 78, touching overbought territory, while the Directional Movement Index (DMI) spiked to 41, indicating strong upward momentum. These momentum indicators suggest that Lido may continue to make gains if buyers can hold on and continue accumulating. However, profit takers pose a threat to the continued uptrend, and if they overwhelm buyers, a pullback is likely to follow. If LDO faces rejection, the altcoin will find support around $0.97.