Lido DAO investors are starting to book profits, but here’s the problem

Lido DAO makes its investors happy. It is among the best performing assets in July 2022.

The LDO token, reflecting market sentiment, has performed extremely well in the market.

However, the question in the room revolves around the impact of this sentiment on the network and the token.

Lido DAO soars

The liquid staking protocol’s native token, LDO, had a pretty phenomenal week. The token recorded a 205.44% rally, with almost 26% of that rally in the last 24 hours of press alone.

Additionally, LDO was one of the few cryptocurrencies to recoup its June losses.

In fact, the 324% month-to-date rally also helped the altcoin invalidate almost all of the decline it saw after the May crash.

Lido DAO Price Action | Source: TradingView – AMBCrypto

It should be noted here that LDO had a lot of investors taking losses.

Moreover, according to last month’s report on this, more than 91.4% of LDO holders were in losses. However, at the time of this writing, around 22% of them have returned to profit status.

Lido DAO invests in profit | Source: Intotheblock – AMBCrypto

The curious case of the sale of LDO

Naturally, those who were just seeing a rally are going to make sure they don’t lose their profits again.

This boosted investor confidence and motivated them to sell the token.

This can also be substantiated by looking at on-chain data for the past 24 hours. About 10.9 million LDOs worth $19.62 million or more have been sold by investors.

Lido DAO balance on exchanges | Source: Santiment – ​​AMBCrypto

Well, it had to happen sooner or later – for the first time in LDO history, over $24 million worth of LDO across the network was profitable.

This value was determined by the total movement of the LDO tokens and the price difference between their purchase cost and their current value.

Benefits across the Lido DAO network | Source: Santiment – ​​AMBCrypto

Additionally, while many investors sold, many others also moved the supply they held. Thus, resulting in a 176% increase in the rate at which LDO changed hands.

Such high velocity confirms that although some of the LDO HODLers sold off their holdings, many others held firm to support the active rally.

Lido DAO Velocity | Source: Santiment – ​​AMBCrypto

Since the altcoin has already recovered the 50-day simple moving average (SMA) (blue) and the 100-day SMA (red) as support, it might be able to rally ahead of $2. (ref. Lido DAO price action image).

The recent selloff will also not have a significant impact on price action, provided investors do not repeat this case any time soon.