Maker [MKR] Price Action Has Been Volatile Over the Past Few Weeks

Maker's [MKR] price action over the past few weeks has been volatile, with the crypto noting a reversal on the charts after hitting a mid-February low.

Maker [MKR] price action has been volatile over the past few weeks, with the crypto noting a reversal on the charts after hitting a mid-February low. In fact, the token rallied to $1,700, only to retrace back to $1,350 – A sign of heavy engagement from investors at key price levels.

To gain a better understanding of how MKR holders are reacting to price movements, we can use the Cost Basis Distribution metric. This analysis will help us identify which supply clusters have been absorbed, where new ones are forming, and ultimately, what implications these trends have on MKR's potential future direction.

Cost Basis Distribution – Where are investors positioned?

The Cost Basis Distribution chart provides a detailed breakdown of how Maker investors have interacted with price movements, highlighting specific price tiers and the amount of token supply held at those levels. These clusters highlight regions where buyers have historically entered the market and where distribution has occurred.

The data suggested that a significant number of investors accumulated MKR when it was trading between $1,300 and $1,500. This zone appears to be a critical accumulation range, and as the price approaches this range again, investor behavior will determine whether support holds or if further downside is likely.

The insights from this analysis can give us a clearer outlook on where MKR might be heading next.

At the time of writing, MKR was trading at $1,279, following a 1.31% decline in the last 12 hours. The 50-day moving average (MA) sat at $1,331, with the same acting as a resistance level on the charts.

A breakout above this level could shift momentum in favor of the bulls. Meanwhile, the 200-day MA at $1,471 will remain a major long-term resistance zone, marking an area where profit-taking is likely to occur.

The Money Flow Index (MFI) had a reading of 29.04, suggesting that MKR may be approaching oversold territory.

If buying pressure increases, a potential bounce from the press time levels could push the price towards $1,350–$1,400, where the next major supply cluster sits. However, if sellers remain dominant, MKR could test $1,200 – A region that previously acted as a strong support.

Investor engagement and market sentiment

A deeper look at investor behavior revealed that recent accumulation trends hinted at a mix of long-term holders absorbing supply and short-term traders rotating out at resistance levels. This dynamic is crucial in understanding the balance of selling and buying forces that will ultimately influence MKR's price direction.

As traders move in and out of positions, their actions are reflected in the shifting levels of token supply at specific price tiers. For instance, if a large cohort of traders sells at a specific price point, this action increases the amount of token supply held at that tier.

Conversely, if buyers step in to absorb this selling pressure, their actions decrease the token supply at that price level. This constant interplay between buyers and sellers, traders and investors, shapes the fluidity of the Cost Basis Distribution model.

This model provides valuable insights into the collective actions of market participants and offers clues about where support or resistance might form as the price trends up or down.

The implications for MKR's price trend will depend on whether this accumulation can continue to build.

The lower bound of this range will be crucial for traders to watch. If MKR manages to hold this level and buying pressure intensifies, the token could attempt another breakout towards $1,600–$1,700.

However, failure to maintain support at its press time levels could lead to a deeper correction below $1,200, where the next demand zone is likely to form.

What’s next for MKR?

Maker's price is at a crucial point, with its Cost Basis distribution highlighting key accumulation and distribution zones. The next move will depend on whether buyers can sustain demand in the $1,300–$1,500 range or if further downside is necessary to establish a new demand zone.

For traders and investors, monitoring the MFI, moving averages, and cost basis clusters will be essential in identifying trend shifts. If bullish momentum returns, a push above $1,400–$1,500 could open the door for a retest of $1,700.

However, sustained weakness may lead to a prolonged correction towards $1,200 or lower. As market conditions evolve, the response of MKR investors at key levels will be crucial in shaping its next major move.