As of the time of writing, the value of Maker (MKR) is $1,528, up nearly 2% in the past 24 hours. It is worth noting that the performance of this token reflects the performance of the broader cryptocurrency market, which has risen 24% this month.
However, despite the increase, Maker has been hovering in the range of $1,419 to $1,550 over the past two weeks. However, the increase in whale activity may help break through these levels.
In fact, data from IntoTheBlock shows that large MKR transactions over $100,000 have increased by 1,400% in just two days, from 3,840 to 60,730 transactions.
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51% of the total supply of MKR is held by whales. Therefore, if the trading activity of the whale group increases, MKR may break out or fall below the consolidation range, depending on whether these traders are buying or selling.
Key levels to watch
To confirm a bullish breakout from the consolidation range on the four-hour chart of Maker, it needs to break above the $1,550 resistance level on high buying volume.
The volume bars are relatively short, indicating a lack of strong buyer interest to push the price above this resistance level. Additionally, the On-Balance Volume indicator appears to be flattening, suggesting that buying and selling pressure may be balanced.
Traders should watch the $1,678 sell-side liquidity. Maker may rise to absorb this liquidity, and if buyers step in during the uptrend, it could lead to a sustained rally. Conversely, if this fails to attract buyers, MKR may return to the consolidation range or decline.
At the time of writing, the Relative Strength Index (RSI) reading is 24, indicating that MKR is oversold. This may also lead to a short-term upward correction.
Meanwhile, traders should watch the $1,419 support level. A break below this support could lead to a bearish breakout of the consolidation and put MKR in a downtrend.
Declining NVT ratio suggests this
Maker's Network Value to Transactions (NVT) ratio has declined from 121.47 to 13.17 over the past two days, indicating a surge in network transaction volume.
Whenever the NVT ratio declines, it suggests that the token may be undervalued. However, the rise in the Market Value to Realized Value (MVRV) ratio from 0.84 to 0.87 during the same period suggests otherwise.
This divergence may indicate that the high trading volume is due to profit-taking activities by whales. This could lead to a downward trajectory on the chart.
Derivatives market filled with uncertainty
In the derivatives market, traders have been uncertain about Maker. Previously, the open interest had dropped from $129 million to $86 million in just two weeks.
A decline in open interest suggests that traders are closing their positions due to uncertainty about future price performance.
The decline in speculative activity may also be one of the key factors contributing to Maker's consolidation phase.
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