Is Lido a good crypto to buy as it defies gravity?

Lido price has defied gravity in the past few weeks as activity in its network holds steady. The LDO token was trading at $1.06 on Tuesday, which was the highest it has been since December 16. It has risen by more than 22% from the lowest level this year.

What is Lido?

Lido is a leading platform in decentralized finance (DeFi) that makes it possible for users to stake coins and earn rewards. It is the biggest liquid staking protocol, where it lets users stake coins like Solana, Ethereum, Polkadot, Kusama, and Polygon. 

Lido has become highly popular among users in the past few months. It has become the biggest holder of Ethereum staking pool where it holds over 4.8 million ETH that provide an APR of 4.6%. It is also the biggest Polkadot pool operator witb over 2.47 million DOT valued at over $11 million with a yield of 14.3%.

Lido faced numerous challenges in 2022. The biggest one was the collapse of Terra and its ecosystem. Before the collapse, Lido was one of the biggest holders of Terra token. As a result, the total value locked (TVL) locked in its ecosystem plunged from over $20 billion to about $5.9 billion.

Lido’s performance, while weak, has been relatively stronger than other cryptocurrencies. This is likely because investors believe that its yield solution is better than those provided by centralized protocols. Some of the top centralized platforms that collapsed in 2022 were BlockFi and Celsius.

Another crypto news was Lido’s collaboration with SSV network to create a distributed validator technology. The developers launched the pilot test for the new solution in December.

As a step towards permissionless participation in Lido’s Ethereum validator sets, we’re very pleased to present our pilot DVT integration with @ObolNetwork.https://t.co/bMMLMf4F8l

— Lido (@LidoFinance) December 23, 2022

Lido price forecast

LDO chart by TradingView

The four-hour chart shows that the LDO price has made a spectacular recovery in the past few days. As it rose, it managed to move above the important resistance point at $0.992, the lowest level on December 12. It also crossed the psychological level of $1.

The coin also moved above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) moved to the overbought point at 80. Therefore, the token will likely continue rising as buyers target the next key resistance at $1.2. A drop below the support at $0.992 will invalidate the bullish view.