The Maker [MKR] token is gaining attention as Ethereum [ETH] continues its upward trend, with analysts predicting that MKR could reach $5,000 by 2025. The recent breakout from a downward trend, along with positive chart patterns, is fueling speculation about a potential price surge.
Currently, MKR is trading at $1,727.42, down 0.69% in the last 24 hours and 15.47% over the week. However, its market capitalization sits at $1.54 billion, supported by a circulating supply of 890,000 MKR tokens.
Given the rising prices of Ethereum and MKR’s technical patterns, there is a belief that the token may experience significant growth in the near future.
Market analysts have pointed out crucial support levels and emphasized how Ethereum’s performance could impact MKR’s price direction.
Breaking Free from a Prolonged Downtrend
From March to November 2024, MKR was stuck in a prolonged downtrend, trading within a descending channel marked by lower peaks and troughs.
However, towards the end of November, the price broke out of this channel, hinting at a possible trend reversal.
Moreover, the emergence of a bullish cup-and-handle pattern between September and November adds to the optimistic outlook for MKR.
This pattern is typically linked to price rallies, with the cup phase symbolizing gradual accumulation and the handle phase indicating brief consolidation before an upward breakout.
These technical signals suggest the potential for an upward price movement in the medium term.
Important Technical Levels to Monitor
The current price of MKR hovers around $1,746, with key support levels at $1,760 and $1,440. Resistance levels to watch out for include $2,200, $3,800, and a potential peak at $4,400.
A golden cross formation was recently observed, as the 50-day Moving Average (MA) crossed above the 200-day MA, indicating bullish momentum.
Despite this, MKR is currently trading below the 200-day moving average ($1,919), which could now act as a resistance level that needs to be reclaimed for sustained bullish movement. Failure to hold above $1,700 might lead to a test of support near $1,500.
Decline in MKR’s Futures Market Activity
Data from Coinglass reveals that MKR’s futures market Open Interest (OI) dropped by -8.67% to $78.83 million, signaling reduced engagement in trading futures. However, trading volume has increased by 41.59% over the same period, reaching $184.94 million.
The decline in OI might indicate a decrease in speculative trading or leveraged positions.
Historically, spikes in OI have corresponded with heightened market volatility. While the recent decrease suggests a pause in speculative activities, it doesn’t rule out the possibility of renewed interest as optimism grows surrounding Ethereum’s expansion.
Strong Confidence among Long-term MKR Holders
On-chain data indicates that 62% of MKR holders are currently in profit at the prevailing price, with 84% classified as long-term investors who have held the token for more than a year.
Large holders dominate 82% of the supply, signifying significant concentration but also reflecting long-term faith in MKR’s potential.
As Ethereum breaks records, MKR’s performance seems interconnected with the broader cryptocurrency market’s trajectory.