Crypto traders bought the dip in several Ethereum staking tokens on Friday, lifting the likes of lido (LDO) and ethena (ENA) up by 14% and 15%, respectively.
The gains follows a week-long decline that took place alongside a rapid shift in sentiment, which is typically a signal to buy.
Lido and ethena are returning to last week’s highs after an early August rally spurred by the U.S. Securities and Exchange Commission’s statement that liquid staking protocols aren’t securities.
The SEC’s statement was viewed as bullish for the decentralized finance (DeFi) ecosystem, in particular for Ethereum-based protocols that depend on staking mechanisms to generate a yield.
The clarity also opened the floodgates for institutions, with Figment’s dominance over other liquid-staking protocols suggesting that institutional inflows were beginning to drive the sector.
Trading volume for ENA trading pairs doubled in the past 24 hours to $1 billion, while LDO is up by 83% to $256 million, according to CoinMarketCap.
The surge in volume coupled with bitcoin (BTC) and ether’s (ETH) ability to hold key levels of support bodes well for the altcoin sector in general, although it’s worth noting that the ether validator queue remains extremely high at 825,580 ETH ($3.8 billion).
When these ether tokens are unstaked, they can either be sold on the open market as a form of profit-taking, or staked elsewhere to generate a higher yield — the former would likely halt any further moves to the upside.