MakerDAO: Whales extend solidarity as MKR braces for key battle on this front

• The MKR supply held by top addresses increased over the past week.
• DAI’s borrowing volume failed to show appreciable growth in the past few months.

According to data from Santiment, MakerDAO [MKR] recorded its largest whale activity in more than three months after two identical transactions worth $17.4 million were made on the network.

? #Maker made its largest whale moves in over 3 months a couple hours ago. 24,331 $MKR ($17.4M) was moved to a whale address, and then another identically sized move was made. On downswings, massive moves like this are often correlated with turnarounds. https://t.co/dHYIdrHy3h pic.twitter.com/vk4dU1G46w

— Santiment (@santimentfeed) February 25, 2023

The data highlighted that 24,331 MKRs were moved to a whale address and shortly after a similar volume was deposited to the original sender by a third address.

At the time of writing, MKR traded in the red after its value declined by nearly 5% in the 24-hour period, per data from CoinMarketCap. The spurt in whale activity was a positive signal for the DeFi protocol’s native token.

Read Maker’s [MKR] Price Prediction 2023-2024

New protocol lends a ‘Spark’

MakerDAO generated a lot of hype in the past few weeks over a new protocol called Spark, aimed at increasing the adoption of Dai (DAI), the fourth-largest stablecoin in terms of market cap.

It culminated with the launch of Sparks Lend on 22 February which would facilitate the lending and borrowing of DAI through a liquidity market.

Currently, the MakerDAO protocol earns revenue through the interest paid by borrowers who receive DAI. According to data from Token Terminal, the borrowing volume on the protocol failed to show appreciable growth over the past few months.

Consequently, the revenue which goes to the MRK holders also exhibited unremarkable growth.

Source: Token Terminal

Will MKR make it to the top?

The MKR supply held by top addresses increased over the past week, corroborating the deduction made earlier.

The network traffic showed promise as well. The daily active addresses spiked nearly 60% from the previous week, while the velocity showed a steep hike as well. This indicated that MRK tokens started to move more frequently between addresses.

Source: Santiment

With the growth in key metrics, investors’ sentiment for MKR turned favorable, as revealed by the positive value of the weighted sentiment.

Realistic or not, here’s MKR’s market cap in BTC terms

MKR moved within the indicated range for the most part of February. The retracement observed over the last few days could be the case of short-term bulls closing their positions to book profits.

A breakout above the range highs would be a bullish signal for MKR. On the other hand, a breakout to the downside would lead to a bearish sentiment.

Source: Trading View MKR/USD

Furthermore, the Relative Strength Index (RSI) dipped below the neutral 50 mark, suggesting that bears were back in action. The On Balance Volume (OBV) started to decline which meant that selling pressure was strengthening.