Lido Finance kicked off the 2023 trading year by displacing MakerDAO as the decentralized finance (DeFi) protocol with the highest total value locked (TVL). Still maintaining its spot, its TVL currently sits at $8.22 billion, per data from DefiLlama.

The reason for the rally in TVL is not far-fetched. With the Shanghai upgrade scheduled to take place before the close of Q1, 2023, the liquid-staking platform has witnessed a surge in the number of staked deposits on its platform.

Further, the growth in user activity on Lido Finance has contributed to a rally in the value of its native token LDO. On a year-to-date basis, LDO's price has gone up by 163%.

Interestingly, while the LDO addresses that hold between 100 and 1,000,000 LDO tokens have spent the last month accumulating the altcoin, holders of 1,000,000 to 100,000,000 LDO tokens gradually let go of their holdings.

Dear bulls and dear bears,
We have something for each of you, to support your take on the market.

For bears,
We are seeing some patterns emerging now, for example on Lido:

It's 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.

Building a top can take time. You never know the timing of top building. No one knows.

For bulls,

The good news is MVRV is not over. It's below dangerous 'overbought' level for a number of assets. Examples below.

We could also assume that some tokens are done, some not yet. We'll see it soon.

Yesterday we tried to evaluate possible market moves using crowd sentiment: https://insights.santiment.net/read/monday-crowd-vibes-7128

Now when US Monday trading session is over we might review onchain activity.

With 24h daily active address metric as a proxy.

Long story short, a large number of tokens is now seeing an increasing divergence between price action (up) and active addresses (down).

Example: YFI

This is a warning sign, many divergencies now have to be reset by either a price dump or increase in activity.

What could be good to observe on many tokens for a rally is an opposite divergence, similar to MKR:

Until then, we might probably expect some gravity push down.

Charts layout: https://app.santiment.net/s/jvnjSOT2

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Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.