Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- MKR’s retracement is approaching a crucial demand zone
- A retest of the demand zone could offer new buying opportunities
Maker [MKR], at press time, was one of the market’s biggest weekly gainers, despite the overall bearish sentiment in the crypto-market. In fact, it recorded gains of 10% compared to Bitcoin’s [BTC] 4.6% depreciation over the last 7 days.
One of the main reasons for the rally could be MKR’s aggressive fee reduction and readjustment, both of which were announced towards the beginning of March.
Read Maker [MKR] Price Prediction 2023-24
MKR sliding into the demand zone – Can bulls prevail?
Source: MKR/USDT on TradingView
After an extended price consolidation in the $683 – $791 range in February, MKR broke above it and inflicted over 20% gains in early March. However, the $964-level has become a key sell pressure (supply zone), preventing further northbound movement. Each price rejection at the supply zone has led to a retest of the demand zone.
If the trend repeats itself, a retest of the demand zone could offer new buying opportunities in the next few hours/days. Long-term bulls could seek entry and target the sell pressure level of $964 – A potential 10% rally with an excellent risk-to-reward ratio (4.3).
A close below $833 will invalidate the bullish thesis. Such a downswing could tip bears to seek short-selling opportunities at $791 or the previous parallel channel’s (orange) mid-level of $740.
The Relative Strength Index (RSI) was below 50, which tip bears to sink MKR to the demand zone. Moreover, the OBV (On Balance Volume) registered a slight decline which could undermine strong buying pressure in the short term and offer bears more influence.
MKR recorded spikes in active deposits and exchange inflows
Source: Santiment
According to Santiment, MKR recorded spikes in exchange inflows – A sign that more tokens were moved into central exchanges for offloading. It revealed increased short-term sell pressure, which could pull MKR to the demand zone. Similarly, the spike in active deposits further reinforced the short-term sell pressure MKR recorded at the time of writing.
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Moreover, the negative weighted sentiment could play in the bears’ favor and push MKR to retest the demand zone ($833 – $860). Bulls could get new buying opportunities at discounted prices if the zone holds.
However, bulls’ efforts could be undermined if BTC drops below $22K. Ergo, investors should track the king coin’s price action on the charts.
