Maker Gains 50% in Seven Day. Is a Trend Reversal Imminent?

Maker has been on an uptrend for the last seven days. It has since reclaimed several critical levels, returning to its thirty-day high.

The coin started the week at $989 and broke above $1k, gaining over 5%. It continued upward the next day, hitting a high of $1,137 before slight corrections. On Wednesday, MKR broke the $1,200 barrier for the first time in over fourteen days.

Thursday was the cryptocurrency’s biggest bullish day, as the asset broke its thirty-day high. It opened trading at $1,172 and shot up, reclaiming the $1,200 resistance and breaking the $1,400 resistance. The cryptocurrency peaked at $1,481 before experiencing slight corrections.

Maker slowed its ascent over the last two days as selling pressure increased. It grappled with significant selling congestion on Friday, resulting in a slip to a low of $1,358 after peaking at $1,500. It traded at $23 shy of $1,600 on Saturday but closed with gains exceeding 3%.

MKR broke above the $1,600 resistance a few hours ago, peaking at $1,638. However, it trades at $1,479 at the time of writing, indicating significant selloffs.

The coin’s sudden price spike surprised many, as it went unnoticed by most traders. It did not spark much debate on social media platforms, leaving many to wonder what fueled the uptrend.

Renewed Interest

Makers’ surge comes amid massive market declines. Assets like Ethereum and XRP saw notable declines over the last seven days and struggled to break out. Bitcoin saw a similar trend, remaining rangebound below $100k.

The derivatives market is less active due to the uncertainty among investors. MKR was not exempt from the trend as it sees negative funding, indicating lesser liquidity pouring into it. As a result, open interest is at its lowest in the last one and a half years.

Data from the crypto tracking platform Kiyotaka shows that derivative traders are less active and have fewer leverage positions. This means that spot investors are responsible for the ongoing uptrends. Trading volume on the coin has surged since the start of the week.

Maker is Overbought

The coin is seeing a spike in selling volume as traders take profit. The candlestick representing the current-day price action may indicate the start of a downtrend. MKR sees notable rejections after breaking above a key level.

The coin has seen peak buying pressure. The relative strength index surged above 70 on Thursday and is at 72. This means the cryptocurrency is overbought and due for a massive correction. Previous price movement shows that the asset lost over 68% a few months ago as it became overbought. A repeat of the event will see the coin lose the $1k mark again.

The Bollinger band hints at further declines. The cryptocurrency broke above the upper SMA on Thursday and remained above it since. Maker may experience more downtrends as a breakout from this metric always results in a trend reversal.

Nonetheless, the moving average convergence divergence remains unaffected by the latest decline and uptrend. The average directional index maintains its trend, indicating that the uptrend may continue.

The Fibonacci retracement level points to the coin’s struggle below the 38% fib level. It recently failed to break the 50% fib mark, resulting in MKR’s slip below $1,500. It may continue downward, retesting the 23% fib level.