The price of LDO, the token of the Lido DAO, fell to around $0.25 within the last 24 hours, with the Relative Strength Index hitting levels not seen since the FTX collapse in November 2022. The drop came as $33 million in liquidity drained from DeFi protocols supporting LDO, pushing the token into extreme oversold territory.
Oversold readings and liquidity drain
Two separate readings put the RSI at 23.93 and 18.17 — both deep in the oversold zone that usually signals a potential bounce. The Money Flow Index also hit 14.72, suggesting selling pressure has dominated recent trading. On Balance Volume has been declining, confirming that the selling isn't letting up.
The $33 million liquidity exit from DeFi protocols linked to LDO adds to the bearish picture. That kind of pullback can force further liquidations and keep the downward momentum going.
Diverging signals from smart money and derivatives
Despite the price pain, positions labeled as smart money are 60.3% long on LDO. That suggests some large players see value at these levels. But the derivatives market tells a different story: the long/short ratio sits at 0.85, meaning more traders are betting against the token than for it. That gap between spot accumulation and short positioning could set up a squeeze if the price starts to rise.
Arthur Hayes enters the picture
Former BitMEX CEO Arthur Hayes bought LDO for the first time, according to on-chain data. Hayes is known for making bold calls in crypto markets, and his entry adds a notable name to the list of buyers at the current price. The timing of his purchase coincides with the deepest oversold RSI reading in over two years.
Potential recovery target
Technical indicators suggest LDO could attempt a 35% recovery rally, targeting $0.35 within 14 days. That would still leave it well below recent highs, but it would represent a sharp bounce from current levels. Whether that move actually materializes depends on whether the buying from smart money and names like Hayes can overcome the short-heavy derivative positioning and the broader liquidity drain.
