Following the recent U.S. presidential election, the cryptocurrency market has witnessed a significant surge, with Bitcoin (BTC) reaching a new all-time high of $89,000. This bullish trend has propelled many alternative coins and meme coins to new heights.
Despite this overall positive momentum, several cryptocurrencies have only experienced minor price rebounds while maintaining a predominantly bearish sentiment. One such cryptocurrency is Maker (MKR), which has shown a modest recovery in its price.
Currently, Maker is trading at $1490, reflecting a 1.90% increase on a daily basis. Moreover, the altcoin has seen gains of 30.8% on a weekly basis and 11.38% on a monthly basis.
However, despite these recent gains, MKR is still notably below its all-time high set four years ago by approximately 76.56%. This suggests that the cryptocurrency is underperforming, leading many investors to remain pessimistic. This sentiment has been reinforced by an increase in exchange reserves and the exchange supply ratio.
Maker’s Exchange Reserve Reaches Annual Peak
Based on CryptoCrypto’s analysis of Cryptoquant data, Maker’s exchange reserve has reached its highest level for the year at the current time.
Our analysis indicates that there has been a significant surge in the altcoin’s reserve on exchanges over the past week following a slight decline at the end of October.
This rise in exchange reserves signals a growing lack of confidence among investors. It is perceived as a bearish sign, indicating that investors and holders are anticipating a price drop and preparing to close their positions to mitigate potential losses.
Moreover, the spike in the exchange supply ratio further confirms the increased inflow into exchanges, also reaching an annual high.
When both of these metrics hit annual highs, it suggests a highly bearish market sentiment with expectations of price declines among most investors.
Implications for MKR Price Trends
Typically, a surge in exchange reserves and the exchange supply ratio indicates bearish sentiments among investors. Despite the recent price surge, the market appears unconvinced about a sustained rally.
Additional evidence of this uncertainty is reflected in the rising Average Directional Index (ADX) and the declining Relative Vigor Index (RVGI).
Observing the ADX, it has risen from 31 to 35 on weekly charts, signaling a loss of momentum in the uptrend and a strengthening downward trend.
A bearish crossover on the Relative Vigor Index further supports this notion, indicating that the uptrend is losing momentum and its strength is diminishing. Such signals often prompt investors to engage in short selling.
Given these indicators pointing towards a potential trend reversal, it is likely that MKR will experience a decline before a new uptrend gains strength in the market.
Therefore, if the bearish sentiment persists, Maker could find support around $1320. Conversely, if bullish momentum prevails following recent gains, MKR may attempt to break the $1600 resistance level.