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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Lido’s further rate of increase above $1.7 has been blocked since mid-August.
- Open interest rates declined steadily in the third quarter of 2023.
Bulls have had no absolute market control since the massive drop in mid-August. For Lido [LDO]The sellers already had the upper hand in mid-July, meaning that shorting stocks yielded impressive gains. According to TradingView, the LDO fell 25% in the third quarter from its press-time level of $1.53.
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Can sellers take advantage again?
Source: LDO/USDT on TradingView
Lido’s 12-hour chart was bearish at the time of writing. The LDO has recorded lower lows and lower highs since mid-July, reinforcing a longer-term bearish bias. It means that going short can be more profitable than going long on the altcoin.
The additional price dump in August created a bearish order block (OB) at $1.67 – $1.74 (red). The bearish OB has been a stubborn resistance for the past two weeks, giving Lido sellers short opportunities.
The dynamic 50-EMA (Exponential Moving Average) recently extended into the bearish OB above, further cementing a crucial roadblock in the coming days. Thus, another price rejection at this level could bring additional shorting profits with an entry of $1.65, a take profit of $1.54 and an exit of $1.7.
However, a move above USD 1.7 and a subsequent close above the bearish OB will invalidate the short idea. Such a move will flip the structure of the higher time frame to bullish, giving bulls a bit of clout.
Meanwhile, the RSI was negative as the CMF headed south, showing that selling pressure was high and capital inflows fell.
Open interest rates fell in the third quarter
Source: Coinglass
According to Coinglass, Lido open interest rates have fallen from >$70 million in July to less than $40 million at release. The decline underscores a steady decline in demand for Lido in the derivatives segment – a long-term bearish bias.
How many Worth 1,10,100 LDOs today?
However, the liquidations facts showed that more short positions have been smashed in the last 12 hours before going to press. If the mild buying pressure increases, Lido could overcome the threshold.
So the sellers can wait for the move to $1.7 and follow suit Bitcoins [BTC] movement before going short on the asset.