Putting the global crypto market’s ubiquitous downward trend aside, Lido Finance (LDO) token has been moving in a bearish direction over the past week. While the universal bearish trend could have contributed to LDO’s downward trend in the past week, research proves it’s more than that.
Over the past week, LDO has recorded a sharp decline in price, falling by 22.4% from a high above $3 as of March 3 to as low as $2.35 at the time of writing. According to Coinmarketcap, more than $500 million has been removed from its market cap over the same period.
Two Instances On Lido (LDO) Decline In The Past 7 Days
Lido’s recent fall in value can be attributed to the recent announcement of Mixbytes, a development team to Lido Finance, disclosing the ending of its support for liquid staking on Polkadot and Kusama.
This announcement has seen most liquid stakers of Polkadot and Kusama withdrawn from the Lido Finance protocol, therefore, affecting both its total value locked (TVL) and native token’s price negatively. In the past 7 days, Lido’s TVL has plummeted alongside LDO price, falling by 5.7%, according to DeFilama.
Mixbytes stated it will no longer “develop and technically support” Lido on Polkadot and Kusama from August 1. In addition, as a result of the update, users will not be able to deposit funds for stake into Lido for the Polkadot and Kusama protocols as of March 15.
Furthermore, Mixbytes further stated in the announcement that it is working on an alternative host for the UI which will be launched by the community on August 1.
Veering back to the reason behind the LDO decline in the past week, another instance is the ongoing rumor shared by Bankless David Hoffman.
According to Hoffman, the United States Securities and Exchange Commission might have issued a Wells Notice to Lido and some other crypto projects in the industry. A Wells Notice is a formal letter sent by the SEC informing a recipient or firm that it is planning to bring enforcement actions against them.
Though Hoffman eventually renounced the rumor, as the news has not yet had any official confirmation, it can be attributed to one of the reasons behind LDO’s falls over the past week.
LDO Continues Downtrend
The past few weeks have not been favorable for LDO as the token has only continued to suffer a downward trend following several negative news circulating in the industry as well as events stated above.
Lido Finance (LDO) price is moving sideways on the 4-hour chart. Source: LDO/USDT on TradingView.comLDO’s past 24 hours trend hasn’t also been any different as the token is currently down 8.5% in the past day with a trading price just above $2. The token’s trading volume has also gone weak indicating a possible continuous downtrend.
LDO’s trading volume has fallen from a high of $239 million on March 3 to a low of $89 million over the past 24 hours. Notably, despite the prolonged downtrend, LDO still ranks firmly as number 30 on the list of cryptocurrencies with the largest market caps, according to Coinmarketcap.
Featured image from iStock, chart from TradingView