Lido DAO [LDO] declined 16.31% over the past 24 hours at press time, after Ethereum’s [ETH] proposed EIP-8361 revived concerns over the future of liquid staking. The proposal aimed to reduce staking yields from around 2.6% to 1.2% as network staking participation increased.
That shift threatened the appeal of liquid staking products such as stETH, prompting investors to reassess Lido’s long-term growth outlook. Trading activity reflected the reaction, with 24-hour volume surging by more than 230% as participants rapidly adjusted their positions.
Although the proposal had not reached implementation, the market priced in its potential impact on Lido’s total value locked and protocol revenue. As a result, the token faced aggressive selling pressure while uncertainty surrounding Ethereum’s staking economics continued to dominate sentiment.
Exchange inflows returns despite LDO selloff
On-chain data revealed a positive spot netflow of approximately $214.13K, indicating that more LDO moved onto exchanges than left them. Exchange inflows often accompany periods when holders prepare tokens for potential selling, making the latest reading consistent with the broader decline.
Unlike previous sessions that reflected stronger withdrawal activity, the latest shift pointed toward increasing exchange availability during heightened volatility. Trading volume also climbed sharply, reinforcing the idea that market participants actively repositioned rather than remaining on the sidelines.
However, the inflow remained relatively modest compared with the spike in trading activity, suggesting that exchange deposits alone did not account for the full extent of the decline. Even so, the change reflected a cautious market that responded directly to Ethereum’s proposed staking overhaul.
Leverage builds as traders increase exposure
Derivatives activity strengthened despite LDO’s sharp correction, with Open Interest (OI) rising 14.26% to approximately $67.18 million as of writing. The increase showed that traders continued opening fresh leveraged positions instead of reducing market exposure after the selloff.
Rising OI during a falling market often reflects growing participation rather than conviction in one direction because both bullish and bearish positions can expand simultaneously.
In LDO’s case, the higher derivatives exposure suggests that traders expected volatility to remain elevated following the proposal’s release. The divergence between weakening spot performance and expanding futures participation highlighted growing speculative interest around the token.
If additional leverage continues entering the market without a corresponding recovery in spot demand, price swings would likely remain elevated over the coming sessions.
Can LDO bulls reclaim control?
LDO rebounded after testing the $0.2757 support level, with buyers responding inside a clearly defined fair value gap extending toward the $0.3000 resistance zone. The recovery interrupted the sharp decline, although the price remained beneath the broken $0.3596 resistance, leaving the broader structure under pressure.
Meanwhile, the Relative Strength Index fell to 36.90 at the time of writing, placing it close to oversold territory after dropping well below its moving average near 53.51. The indicator suggested that selling pressure had intensified before buyers stepped in around support.
Even though the rebound improved short-term conditions, RSI had not yet confirmed a bullish reversal. If buyers reclaim the Fair Value Gap (FVG) and close above $0.3000, recovery could extend toward $0.3596. Failure to defend $0.2757 would likely expose $0.2385 as the next major support.
Final Summary
- LDO found support, but exchange inflows and weak RSI kept recovery prospects uncertain.
- Rising Open Interest showed traders increased exposure even as bearish pressure persisted.
Be the first to comment