Maker (MKR) is currently priced at $1,513, showing a slight rise of nearly 2% in the past 24 hours. Notably, the token’s performance has closely followed the broader cryptocurrency market, experiencing a 24% increase in value over the last month.
While Maker has seen significant gains recently, it has been range-bound between $1,419 and $1,550 for the past two weeks. However, a surge in whale activity may potentially help it break out of this consolidation phase.
Recent data from IntoTheBlock indicates a remarkable 1,400% increase in large MKR transactions exceeding $100,000, jumping from 3,840 to 60,730 transactions within a span of just two days.
Whales currently hold 51% of the total MKR supply. Therefore, any increased trading activity from this group could potentially push MKR above or below the current consolidation range, depending on their buying or selling behavior.
Crucial Levels to Monitor
To signal a bullish breakout from the consolidation phase visible on the four-hour chart, Maker needs to surpass the $1,550 resistance level with significant buying volumes.
Analysis of the short volume histogram indicates a lack of strong buyer interest in pushing the price beyond this resistance. Moreover, the on-balance volume indicator appears to have leveled off, suggesting equilibrium between buying and selling pressures.
Traders should pay attention to the sell-side liquidity at $1,678. If Maker manages to breach this liquidity barrier and attracts buyers during this upward momentum, it could trigger a sustainable rally. Conversely, a lack of buyer interest in response to this move might lead MKR back to the consolidation range or even lower.
Currently, the Stochastic Relative Strength Index (RSI) stands at 24, signifying oversold conditions for MKR. This could potentially prompt a corrective upward movement in the short term.
Additionally, traders should keep an eye on the $1,419 support level. A breach below this support could result in a bearish breakout from the consolidation phase, potentially initiating a downtrend for MKR.
Decreasing NVT Ratio Indicates…
The Network Value to Transaction (NVT) ratio for Maker dropped significantly from 121.47 to 13.17 within the past two days, suggesting a surge in on-chain transactions.
A decreasing NVT ratio often implies that a token may be undervalued. However, the Market Value to Realized Value (MVRV) ratio increased from 0.84 to 0.87 during the same period, indicating a different narrative.
This divergence could indicate that the surge in transactions is possibly linked to profit-taking activities undertaken by whales, potentially paving the way for a downward trend in the market.
Derivatives Market Reflects Uncertainty
In the derivatives market arena, sentiment towards Maker appears uncertain. This uncertainty is illustrated by the decline in Open Interest from $129 million to $86 million in just a fortnight.
A drop in Open Interest typically reflects traders closing their positions on a token due to uncertainties surrounding its future price movements.
This reduction in speculative activity could be one of the primary reasons for Maker’s current consolidation phase.