Maker holders set to log over 50% profits, here’s how
- MKR’s MVRV ratio over a 365-day window period has exceeded 50%.
- While MKR accumulation has climbed, some traders have started selling.
Following a 14% jump in value in the last year, the Market Value to Realized Value ratio (MVRV) of MakerDAO’s MKR token on a 365-day moving average has now surpassed 50%.
— Ali (@ali_charts) July 29, 2023
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An asset’s MVRV ratio measures whether it is overvalued or undervalued. According to Santiment, MVRV shows the ratio between the current price and the average price of every coin/token acquired. The more the ratio increases, the more people will be willing to sell as the potential profits increase.
At press time, MVRV ratio (365 days) of Maker stood at 53.49%, indicating that MKR’s current market value was more than 50% higher than its average price over the past year. Therefore, holders who bought MKR in the last 12 months might be inclined to sell.
But is this the right time for that?
Things look good for now
MKR traded at $1,270.83 per token at the time of writing. In the last week alone, the coin’s value jumped by 22%, making it the asset with the most gains during that period, per data from CoinMarketCap.
The surge in price was due to increased accumulation by daily traders. On a D1 chart, buyers remained in control of the MKR market. A glimpse of its Directional Movement Index (DMI) showed the positive directional index (green) at 42.29, sitting above the negative directional index (red) at 8.36. This indicated that MKR buyers’ strength exceeded that of its sellers.
Likewise, key momentum indicators rested above their respective center lines. The Relative Strength Index (RSI) and Money Flow (MFI) index were pegged at 73.46 and 71.23. Those values suggested that MKR accumulation momentum was high and it was nearing a state of being overbought.
Further, an assessment of the token’s ratio of daily on-chain transactions in profit to loss confirmed that MKR transactions yielded more profits than losses in the past week. According to data from Santiment, on a 7-day moving average, this metric was 2.53%. This meant that the number of profitable transactions was double that of transactions that returned losses during that period.
Read Maker’s [MKR] Price Prediction 2023-2024
Make hay while the sun shines
While MKR’s price rallied in the last week, a rising wedge pattern was created. This pattern is formed when an asset’s price grows over a period of time. It is typically followed by a breakout period that leads to a decline in such an asset’s value.
On a D1 chart, MKR appeared poised for a similar breakout. At press time, its price rested on the lower trend line, accompanied by a gradual fall in trading volume. Although accumulation persisted, profit bookers have begun offloading their holdings.