- Spark protocol coming to Gnosis chain fuels positive sentiment among MKR holders.
- MKR bulls demonstrate strong momentum and resilience but will sell pressure be imminent?
Maker DAO’s native token MKR was seen making it to the headlines after rallying by more than 50% in the last seven days. This makes it one of the best-performing cryptocurrencies during the aforementioned period.
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MKR owes this performance to a series of favorable events that took place in the last few days. Among those events include the expansion of the Spark protocol to the Gnosis chain. A move that could lead to more utility and demand for the DAI stablecoin. Key benefits include Gnosis chain’s high level of decentralization and lower transaction costs.
According to ASXN, MKR is up more than 40% in the past 7 days, due to the Smart Burn Engine proposal, the expansion of the Spark protocol, the deployment of the MKR repurchase contract, and the growth of fee capture (annualized revenue of $117m). A group of addresses with similar…
— Wu Blockchain (@WuBlockchain) July 6, 2023
MKR also owes its robust bullish performance to other factors such as MKR repurchase contract deployment and fee capture growth. But just how impressive was its growth? Well, a look at its price action revealed that it traded as low as $870 in the last seven days. It bounced off its 200-day moving average and soared as high as $1080.
Source: TradingView
Will MKR lend itself to the mercy of the bears?
While we may not know for sure whether MKR will continue rallying or give up recent gains, some metrics offered useful insights. For example, its on-chain volume just peaked at a new monthly high in the last 24 hours. Perhaps a sign that retail buyers have been buying near the latest highs.
Source: Santiment
One of the main reasons why the volume observed is important is because of exit liquidity. Maker’s network growth also peaked at a new monthly high on 3 July. However, it has since dropped and was seen approaching the lower monthly range.
While the network growth may look bearish, it is worth noting that MKR is so far holding on to most of its recent gains. This is partly because the whales have also been buying. The latest data on the supply held by top addresses revealed a slight uptick.
Source: Santiment
How many are 1,10,100 MKRs worth today?
The supply held by top addresses confirmed that whales were still buying at higher price levels. A sign that the short-term bullish outlook remains strong. It could also mean that strong sell pressure wasn’t anticipated. As such, the MVRV ratio pivoted back up.
MKR’s ability to resist the downside will largely depend on whether investors will be incentivized to hodl. The easiest way that can happen is if the crypto market continues with its bullish bias.
