Sell the News" Event Feared After Big "Merge" Day

following the big "Merge" day, LDO may experience a "sell the news" event.

After a strong month of gains, bears have taken control of Lido Finance (LDO), driving the price down by double digits. This sharp reversal highlights the volatile nature of the crypto markets and investors should be cautious when entering or exiting positions.

It's no secret that Ethereum is facing some big challenges in the near future. The most anticipated event in the Ethereum community is the Constantinople hard fork, which is set to take place on January 16, 2019.

  • It is clear that LDO is in a period of decline, losing value rapidly over the last month. However, it is still trading above $1, indicating that there is still some interest in the coin. It is possible that this decline is simply a correction after the coin experienced a period of rapid growth, or it could be the beginning of a more sustained decline. Only time will tell.
LDOUSD. Source: TradingView
The LDOUSD currency pair represents the value of the US dollar against the Libyan dinar.
  • It is clear that the token in question has been on an uptrend in the lead up to the event. However, it has failed to maintain this momentum since mid-August, due to slow demand for staking and mixed expectations for the Merge. As a result, its price movement has been relatively stagnant.
  • Many experts believe that the Merge could become a "sell the news" event, further extending its downtrend. This could mean trouble for the company, as their stock price may continue to fall.
  • As the most popular Ethereum 2 staking-as-a-service provider, Lido is in a unique position to help shape the future of the Ethereum network. With 31% of the ETH staked through Lido, the company has a major impact on how the network functions. As Ethereum 2 continues to grow and evolve, Lido will be there to help guide the way.
  • As more and more people continue to move their ETH holdings over to Ethereum 2.0, it's clear that this new platform is quickly gaining traction. With Lido's recent deposit of 4.14 million ETH into the Ethereum 2.0 smart contract, it's clear that this platform is here to stay.
  • The decentralized online liquid staking protocol was established as a counter-risk to centralized crypto exchanges. These exchanges are required to comply with jurisdictional regulations, which can often stifle innovation and prevent users from accessing the full potential of their investments. The liquid staking protocol allows users to retain full control of their ETH, while still being able to participate in the benefits of staking. This gives users the best of both worlds: the security of a decentralized protocol and the flexibility of a centralized exchange.
  • The Ethereum community is divided on the issue of centralization, with some fearing that Lido's dominance will lead to a more centralized system.
  • The report underscores the importance of the staking pool being sufficiently decentralized in order to remain censorship resistant. This is because concentration of ownership of LDO tokens was observed to potentially compromise this quality.

It's been a rough few weeks for Lido Finance (LDO) holders. The token has lost over 40% of its value since mid-March, and there's no sign of a rebound anytime soon. The upcoming merge with Ethereum isn't providing much relief either, as many investors are worried about the token's future.