What these divergences mean for LDO’s waning buyers’ interest
With the Ethereum Merge just a few weeks away, happenings around the number one protocol facilitating the staking of ETH – Lido Finance – have become more interesting. Data from Santiment revealed that over the last few months, Lido’s native token, LDO, exhibited divergences in some of its on-chain metrics.
In fact, according to Santiment, these divergences are signs that buyers have slowed token accumulation.
Santiment, in its latest report, highlighted that since around 2 August, LDO has exhibited a divergence between its price/volume. A divergence between these two on-chain metrics occurs when the price of a token rises and instead of a corresponding rally in trading activity, the token’s trading volume continues to drop.
The price of LDO has grown by 27% since the aforementioned date. On the other hand, its trading volume has declined by 8%.
Source: Santiment
Another divergence spotted on-chain was LDO’s price/transaction volume divergence. Santiment also revealed that while the price per LDO grew by over 213% since mid-July, the aggregate amount of LDO tokens involved in all transactions executed between then and press time dropped by 82%.
This highlighted buyer exhaustion, with the same not exactly a sign of a healthy market.
Source: Santiment
Furthermore, the social coloration enjoyed by LDO, one that saw its price rally by over 400%, has started to wane. According to Santiment, since 25 July, as the price of the altcoin grew, its social volume continued to drop with each spike in price. It argued,
“… this suggests that the excitement around LDO is dwindling, which usually translates to less new buyers to join in the fun.”
Source: Santiment
Additionally, LDO highlighted a divergence between its price and its Age
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