MKR [MKR] Has Displayed Significant Strength Despite the Downturn in the Broader Crypto Market

MKR has rallied by 23% to approximately $1727. This is a continuation of the bullish trend it established in the past week, which has cumulatively jumped by 42%.

Maker [MKR] has displayed significant strength in the market despite the downturn in the broader crypto market. In the past 24 hours, it rallied by 23% to approximately $1,727.

This is a continuation of the bullish trend it established in the past week, which has cumulatively jumped by 42%.

Recent interest from large investors, who control a significant supply of the asset, as well as derivative traders in the market, has added to the ongoing rally with their current efforts.

Large transactions see a jump

After a period of decline, large transactions have begun to gradually climb as investors with sizable funds start purchasing the asset.

In the past 24 hours, this cohort has purchased 31,000 MKR, amounting to $47 million at the time of analysis.

When there’s a notable surge in trading volume like this, and it corresponds with a price increase, it suggests that these investors are bullish on the asset.

Source: IntoTheBlock

This surge was accompanied by growth in daily active addresses, a metric that measures traders’ interaction with the token. A rise in DAA implies that more traders are engaging with the token.

Data from IntoTheBlock showed that active addresses have increased by 52% in the past week, meaning interest has been growing alongside the price increase during this period.

A brief pause before a rally?

MKR’s rally could see a brief pause before continuing upward. Currently, the asset has broken through a descending resistance line pattern on the chart, hinting at a possible rally to the peak.

If the rally picks up from this price level, MKR could gain 126%, reaching a new high of $3,893, as indicated on the chart.

However, there’s a possibility this breakout from the descending line could be a fakeout, as seen in the last occurrence marked in the yellow circle.

Source: TradingView

A closer look at the Relative Strength Index (RSI) indicator suggests this could be a fakeout. The RSI has crossed into the overbought region, meaning the asset is likely to retrace.

As seen on the chart, the possible drop would lead to a support level at $1,486.

If the support level holds strong, MKR would likely continue its upward trajectory, reaching the set target of $3,893 as sentiment strengthens.

DeFi traders’ bullish sentiment strengthens the narrative

The bullish sentiment among DeFi traders suggests the decline is likely a brief halt in the ongoing market rally. 

At the moment, long traders in the market have continued placing buy bets, and the Funding Rate remained considerably high at 0.0291%, as indicated by Coinglass.

When there’s a surge like this, it implies that long traders have strong conviction in their positions and are paying a premium fee periodically to maintain them.

If the market remains bullish—meaning more traders keep their buying positions open—the anticipated decline due to the overbought RSI would likely be temporary, and the asset could climb higher.