Lido (LDO), the liquid staking protocol for Ethereum (ETH) and Polygon (MATIC), experienced a significant price surge in the last 24 hours following the long-awaited approval of spot Ethereum ETF applications by the U.S. Securities and Exchange Commission (SEC) on Thursday.
The protocol’s native token, LDO, has successfully climbed back to $2.30 and is attempting to break out of its one-month downtrend that has persisted since the market correction in April.
When the Ethereum ETF is approved, will the LSD sector soar?
In an official filing, the SEC explained why it approved the Ethereum ETFs, emphasizing that the plans complied with the Exchange Act's requirements as well as any applicable laws pertaining to national securities exchanges.
In order to avoid fraud and manipulation, protect investors, and preserve the public interest, the Commission has concluded that proposals from reputable companies like BlackRock, Grayscale, Bitwise, VanEck, Ark Invest/21Shares, Invesco Galaxy, Fidelity, and Franklin Templeton meet the necessary criteria.
When discussing the Ethereum ETF clearance on X (previously Twitter), cryptocurrency analyst Daan Crypto Trades noted that two sectors have emerged as the clear beneficiaries as a result of the new index funds approval.
One of the prominent sectors is Liquid Staking Derivatives (LSD) coins, with Lido leading the way. Lido supports staking on the Ethereum blockchain without requiring token locking or infrastructure maintenance, allowing participants to engage in activities like lending and farming.
Early Friday, LDO peaked at $2.49 before retracing to its current price of $2.35. Large investors show significant interest in the token, as Spot On Chain data indicates that six new wallets/whales withdrew 4.3 million LDO ($9.59 million) from Binance in the last 24 hours. This suggests growing interest in holding the token, with sentiment pointing towards a potential price increase alongside Ethereum once the newly approved index funds for the second-largest cryptocurrency hit the market in the coming months.
Additionally, CoinGecko data reveals that Lido’s trading volume reached $350 million in the last 24 hours, a 78.60% increase from Thursday. Despite this, the token remains 68% below its all-time high (ATH) of $7.30 from the 2021 bull market.
Looking ahead, bullish investors should monitor the next resistance level on the LDO/USD daily chart at $2.55. Breaking this level is crucial for ending the downtrend of the past month, potentially leading to retests at $2.70 and $2.90.
May 2024, Cryptoniteuae