Maker exchange data suggests that selling activity could be rising intensifying the bearish pressure.
- Maker price has bounced from a nine-month low, suggesting that the price may have bottomed. However, exchange data shows an influx of MKR held on exchanges.
Maker [MKR] has been underperforming since MakerDAO announced its rebrand to Sky. Last week, Maker plunged to a nine-month low, and while the token shows signs of a bounce, several bearish signs remain evident.
MKR traded at $1,600 at press time, having dropped by 24% in the last 30 days. The token’s market capitalization has also fallen to $1.4 billion per CoinMarketCap.
Since July, MKR has been making lower highs indicating a prolonged bearish trend. The token has also been moving within a descending channel, but it is currently attempting a breakout.
However, breakouts from descending channels are typically supported by a surge in buying volumes. This is currently not happening as trading volumes have dropped as seen in the volume indicator.
The volume histogram bars have also turned red suggesting that selling pressure has overwhelmed buying pressure.
Source: TradingView
At the same time, the Moving Average Convergence Divergence (MACD) line is showing a bullish divergence. This line is still negative, but it has crossed above the signal line and tipped north.
So, bullish momentum could be building up.
The same trend is also seen in the green MACD histogram bars. However, for a strong bullish reversal to be confirmed, it needs to be accompanied by a rise in buying activity.
Maker exchange flow data
Maker’s rebrand to Sky was marred with controversy after the team announced it would be upgrading the DAI stablecoin to USDS.
Recently, it announced that the USDS stablecoin will launch on Solana [SOL], which stirred slight gains for MKR.
However, the positive sentiment was shortlived as exchange data suggests that selling activity could be rising. Per CryptoQuant, the MKR exchange supply ratio has increased to the highest level since April.
Source: CryptoQuant
This data suggests an increase in MKR supply on exchanges. While this could show some traders are swapping their MKR tokens for SKY, it could also indicate selling pressure given the recent drop in price.
Buyers are needed to absorb this sell-side pressure and aid Maker’s recovery from range lows. However, traders might not be ready to enter the market as the overall trend is still bearish.
Data from IntoTheBlock shows that there are more bears than bulls suggesting that the overall sentiment remains negative.
Source: IntoTheBlock
Take a Survey: Chance to Win $500 USDT
Next: Charting Ethereum’s road to $2900 as whale buys ETH worth $132 mln
Source
