After experiencing a significant rally of over 170% since June 2023, it appears that Maker (MKR) bulls are starting to lose momentum. This can be observed through the recent price action and decisions made by influential whales in the market. While MKR is currently trading near its 2023 highs, it has seen a 16% decline from its peak in October.
There are indications that MKR is being sold off at a faster pace, which is reversing the gains made earlier in the fourth quarter of 2023. According to The Data Nerd, Falcon X, an intermediary, has sent 5,690 MKR tokens worth $8.52 million to multiple exchanges, primarily OKX and Binance, at an average price of $1,497.
The transfer of tokens to centralized ramps, as is happening now, is often interpreted as a bearish signal. It suggests that whales are moving their coins to exchanges with the intention of liquidating and exiting their positions. This can negatively impact sentiment and lead to a decline in the token’s value.
However, it is important to consider the timing of such transfers. In certain cases, the movement of tokens to exchanges can be seen as a bullish sign. Whales may choose to provide liquidity for other traders by moving their tokens. Falcon X, for example, offers institutional investors access to liquidity and execution services. It has been utilized by other crypto exchanges and liquidity providers in the past. As Falcon X acts on behalf of institutions and whales, it is unclear which client is responsible for selling MKR.
According to The Data Nerd’s statistics as of October 27, Falcon X holds 10,150 MKR tokens worth $14.17 million at current rates. Following the recent transfer, MKR has experienced a 4% decline.
Currently, MKR is under pressure. Despite its overall uptrend and a remarkable 170% rally in four months, it has dropped 15% from its October highs. Additionally, there is a double top formation, a technical pattern that may indicate a local top.
To invalidate this pattern, MKR would need to experience a significant breakout above $1,650. Conversely, if there are substantial losses and high participation levels push the price below $1,350, it could trigger a sell-off.
In May 2023, MakerDAO, the issuer of MKR, announced the launch of the “End Game.” This initiative involves deploying the protocol on its independent blockchain, introducing new features, and launching two tokens. Maker has also implemented a smart burn mechanism, which involves purchasing MKR tokens from the open market and burning them without closing any collateralized debt positions (CDPs).
It is important to note that the information in this article is sourced from The Data Nerd and should be considered within the context of the market. The future of MKR remains uncertain, and investors should exercise caution when making decisions.
Feature image from Canva, chart from TradingView.
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