Maker [MKR] Tests Support at $1,279 as Investors Await the Next Move

After a sharp dip to a mid-February low, the token made a brief rally towards $1,700, only to retrace back to the $1,350 mark.

Maker [MKR], a cryptocurrency used for decentralized finance (DeFi), has been in the news a lot lately due to some significant price action. After a sharp decrease to a mid-February low, the token experienced a brief rally.

Now, as MKR’s price tests support, there are some interesting observations from the Money Flow Index (MFI) and Cost Basis Distribution that might provide clues about what could happen next.

As we mentioned in a previous analysis, MKR’s price has been moving within a crucial support zone at $1,200. This level was tested during the March downturn and later acted as a strong support zone when the price bounced back.

If this support level breaks, we can expect to see a deeper correction, potentially pushing MKR towards the 0.382 Fibonacci retracement level at $987.6 or even lower.

On the other hand, if buyers manage to intervene and prevent the price from falling below the $1,200 zone, we can anticipate a return of buyers at this important demand zone. This could lead to an attempt by the sellers to reach the 0.236 Fibonacci retracement level at $1,091.8.

However, if the price trends upward from the $1,200 zone, we might see a steeper ascent as the market participants realize that the correction has reached its minimum. This could result in a faster move toward the 0.236 Fibonacci retracement level at $1,091.8 or even the 0.382 Fibonacci retracement level at $987.6.

The chart shows that the majority of MKR investors are in the $1,300–$1,500 range, which is also a major supply cluster. This observation is derived from the Cost Basis Distribution on the chart.

As the price approaches these levels again, the behavior of investors will play a crucial role in determining whether the support at $1,300 holds or if we can expect further downside.

If buyers are still engaged and willing to accumulate at these levels, we can anticipate an increase in buying pressure, ultimately leading to upward movement of the price.

But, if this support fails to hold and we see increased selling pressure from the market participants, we can expect further downside and deeper correction.

Another interesting finding is that LTerm holders have been accumulating MKR at lower prices, while ST traders have been rotating out of positions at resistance zones.

This pattern might indicate that the price trend will depend on the strength of accumulation in the $1,300–$1,500 range.

If the DEVI_LONG term holders manage to sustain demand and we see an increase in buying pressure, we can anticipate an attempt by the sellers to breakout towards the $1,600–$1,700 zone.

However, if we see further selling pressure and the support fails to hold, we can expect a deeper correction, potentially pushing MKR towards the $1,200 zone, where we can expect potential buyers to step in and help prevent further downside.

The chart also shows that MKR has been moving below the 50-day MA of $1,331, which is providing resistance to the token.

Breaking above this level could shift momentum in favor of the bulls. However, the 200-day MA at $1,471 provides a crucial long-term resistance level, where we can expect profit-taking to create selling pressure.

At the time of writing, MKR is trading at $1,279, with a 1.31% decrease in the last 12 hours.

The Money Flow Index (MFI) is currently at 29.04, which suggests that the token is approaching oversold conditions.

This could indicate that the altcoin is due for a potential bounce.

If buying pressure increases and we see a decrease in selling pressure, we can expect MKR to rebound towards the $1,350–$1,400 range, where the next major supply cluster lies.

But, if sellers continue to dominate the market and the price fails to find support at the $1,200 level, we can expect to see further downside and deeper correction.