Maker’s Sky rebrand leads MKR to multi-month lows: What comes next?
The recent transformation of Maker [MKR] into Sky aimed to increase network usage and ensure compliance with regulations. However, this change seems to have not been well-received by some investors.
As reported by Spot On Chain, an early supporter of the project has sold more than half of their holdings. They originally bought 451 MKR in 2017 for about $23 per token.
On September 5th, they sold 251 tokens for $408,000 while retaining 200 MKR.
Following the rebrand, Maker has been facing downward pressure. On August 27th, when the rebrand was launched, MKR was trading at approximately $2,175.
Since then, the token has fallen by over 24%, currently trading at $1,628.
Downward trend takes Maker to an eight-month low
Maker has reached its lowest price point since early January 2024. The token’s movement within a bearish downward channel posed a risk of breaching the lower trendline, signaling potential further price drops.
The Moving Average Convergence Divergence (MACD) also supported the bearish narrative. With the MACD below the signal line, it indicated ongoing bearish momentum.
Additionally, the MACD histogram bars have turned red, underscoring the potential for further price declines.
This bearish trajectory might continue due to a lack of buying interest in the market. The Relative Strength Index (RSI) at 31 reflects a dominance of sellers.
Moreover, the RSI line moving below the signal line, forming lower lows, highlights the continued selling pressure.
The exchange inflows data also indicates a lack of buying activity. According to CryptoQuant, MKR exchange inflows surged to the highest level since May shortly after the rebrand to Sky.
Observing the increased MKR supply on exchanges amidst low demand, as noted by CryptoCrypto, supports the bearish outlook and the potential for further declines.
Furthermore, the derivatives market paints a bleak picture. Coinglass reported that Maker’s Open Interest plummeted to $82M, the lowest level seen since July.
This drop in Open Interest suggests that traders are closing their positions due to uncertainty in the market.
Despite the negative sentiment, there may be a ray of hope. Funding Rates have turned negative following the significant decrease in Open Interest.
This shift indicates that short traders are closing positions to take profits, signaling a possible weakening of the downtrend.