The recent decision to rebrand Maker [MKR] as Sky aimed to spur network activity and ensure adherence to regulations. However, the transition seems to have unsettled certain investors.
Reports from Spot On Chain reveal that an original backer of the project has divested more than half of their holdings. Acquired in 2017 at approximately $23 per MKR, this investor recently sold 251 tokens for $408,000, retaining 200 MKR.
The timing of this move coincides with MKR facing continued bearish pressure. Since the rebrand launch on August 27th, the token’s value has plummeted by over 24% from $2,175 to $1,628 as of the time of reporting.
Maker Hits Eight-Month Price Low
Current valuations position Maker at its lowest point since early January 2024. The token’s downward trajectory, suggestive of a bear market, raises concerns about breaching the lower trendline and potential further descents.
An analysis using the Moving Average Convergence Divergence (MACD) indicator corroborates the prevailing bearish sentiment. With the MACD residing below the signal line and displaying negative values, indications point towards sustained downward momentum.
Moreover, the MACD histogram registering red bars signals impending price declines, urging traders to prepare for additional setbacks.
The lack of market participants on the buying side, as depicted by the Relative Strength Index (RSI) at 31, underscores the prevailing bear dominance. Notably, the RSI line’s descent below the signal line and formation of lower lows emphasize the sellers’ stronghold.
Further validating the dearth of demand amidst consistent selling pressure are insights from exchange inflows data. CryptoQuant data reveals a spike in MKR inflows post the Maker-to-Sky transition, indicating elevated selling activity.
Market analytics firm CryptoCrypto highlighted an escalation in MKR supply on exchanges alongside tepid demand, as illustrated by the RSI metrics. This aligns with the reinforced bearish stance against MKR and the likelihood of additional downturns.
Moreover, derivatives markets paint a bleak picture, with Coinglass reporting a substantial drop in Maker’s Open Interest to $82M, the lowest since July.
This decline signals traders’ uncertainty, prompting them to liquidate existing positions in the face of prevailing market conditions.
Nonetheless, a faint silver lining emerges amidst the gloom. With Funding Rates turning negative post a sharp decline in Open Interest, it indicates a reversal in bearish trends as short traders exit positions to book profits.