Crypto Analytics Firm Warns Traders About Ethereum-Based Altcoin That’s Exploded Over 164% in Two Weeks
Blockchain intelligence platform Santiment warns that the massive rally recorded by a top-50 altcoin could be coming to an end.
Santiment says that the governance token of the Ethereum (ETH)-based staking network Lido DAO (LDO) is showing a divergence between the price and the number of active addresses as well as network growth.
“It’s [Lido DAO] in the process of building the top, in the final stage of divergences. Divergence in network activity and in network growth:
Price remains on top, however active addresses and network growth are down.
This is usually a bearish sign, a well-known pattern.”
Lido DAO is trading at $1.85 at time of writing. The governance token hit a low of $0.935 on December 28 and climbed to a high of $2.41 earlier this week, a gain of 158%.
Santiment then turns to Ethereum in addition to the governance token of the decentralized autonomous organization MakerDAO (MKR) and decentralized finance protocol SushiSwap (SUSHI). Santiment says that the market-value-to-realized-value (MVRV) ratio of the three crypto-assets suggests that they are not overbought.
The MVRV ratio is used to assess market profitability and determine whether the price of an asset is below or above the fair value.
“For bulls, the good news is MVRV is not over. It’s below dangerous ‘overbought’ level for a number of assets.”
Ethereum is up by 10% over the past week while MakerDAO and SushiSwap have appreciated by 24% and 15%, respectively, over the same period.
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Author: Daily Hodl Staff
