Lido DAO (LDO) has been under significant selling pressure in recent weeks, shedding 43% of its value in just over two weeks. After falling below the psychological $1 mark, the price of LDO is now approaching a crucial support level at $0.88, which has only been tested twice in the past two years. As the token nears this level, questions arise about whether it will hold or give way to further losses.

The current price action reflects an ongoing bearish trend that began in February when Lido DAO fell below its three-month trading range. LDO’s decline has been swift, and the $0.88 support level now stands as a critical point for the bulls to defend. A drop below this key level could signal the beginning of deeper losses, making it important for investors to assess whether the price will stabilize at this support or break lower.

Technical Analysis: What’s Next for Lido DAO?

Lido DAO’s price action suggests that the ongoing downtrend may not be over yet. By analyzing Fibonacci retracement levels based on significant swing points, it becomes clear that the price is nearing another important level. The token stalled briefly at the 78.6% retracement level, but continued selling pressure has already driven the price below the 100% retracement mark. The next potential target for Lido DAO is the 23.6% retracement level at $0.545.

If Lido DAO does fall to this level, it would set new multi-year lows for the token. This support area aligns with previous support levels around $0.46 and $0.5, which were defended by bulls in June 2022. A decline to these levels could signal further bearish sentiment in the market, especially if the selling pressure persists.

Bearish Sentiment and Rising Selling Pressure

The market structure for Lido DAO remains firmly bearish, as indicated by key technical indicators. The Relative Strength Index (RSI) has dropped into oversold territory, highlighting significant bearish momentum. Additionally, the On-Balance Volume (OBV) indicator has also reached new lows, confirming the heavy sell pressure that has driven the token lower.

While the $0.88 support level has historically been significant, there is no certainty that it will hold in the face of such strong bearish momentum. The continued downtrend and negative indicators suggest that a break below $0.88 could open the door to further declines, potentially bringing Lido DAO closer to the $0.545 level.

Risk vs. Reward: Should Investors Buy Now?

At this juncture, buying Lido DAO at current levels seems to go against the trend. The technical indicators clearly favor the bears, with the overall market sentiment remaining negative. Investors should exercise caution, as the risk of further losses is high. Though the potential for gains could be significant if Lido DAO reverses course, the market structure does not currently support a bullish reversal.

The key question for investors is whether it is better to wait for a clear reversal signal or attempt to catch a potential bounce at the $0.88 support. With the technical indicators showing oversold conditions, a short-term bounce could be possible. However, the broader bearish momentum suggests that the downside risk outweighs any potential upside for now.

Conclusion: The Future of Lido DAO

Lido DAO is at a critical point, with its price approaching the key $0.88 support level. The token has experienced a steep decline and continues to face significant selling pressure. While the $0.88 level has been important historically, the current market conditions point to the possibility of further losses, with the next target being $0.545. Investors should carefully consider the risks before entering long positions, as the bearish trend is still in place, and there are no clear signs of a reversal.