MKR bulls continue to dominate the market but should traders expect a dip?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- MKR has both bullish momentum and structure on the one-day chart
- Demand in the spot markets was encouraging and showed the token is likely to break above the $1,500 resistance
Maker [MKR] has gained 35% and counting in just over two weeks. The rally from the $1071 level has not yet halted, although the bears did beat the bulls back slightly from the $1500 high MKR reached a few hours ago.
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A previous analysis from AMBCrypto pointed out a few days ago that the $1235-$1279 zone was a region of support where the bulls could initiate another move upward. How much further can this rally extend?
The Fibonacci extension levels showed the rally was likely to go past $1500
On the one-day chart, the market structure of MKR was strongly bullish. The rally in June in July saw a pullback to the $1037 level and consolidated there for a few days. This was the 61.8% retracement level. The move past $1121 on 31 August flipped the structure bullishly and the rally continued to surge higher.
The Relative Strength Index (RSI) was at 72 to show intense northward impetus but worryingly, the On-Balance Volume (OBV) has only noted relatively minor gains in September. The conclusion remained positive for the buyers and it was likely that MKR would move past $1500 to the 61.8% extension level at $1700.
However, it was possible that MKR could face resistance at the 23.6% extension level at $1497 and witness a minor dip to retest the $1350-$1370 former resistance zone. This could offer buyers an opportunity to re-enter long positions.
Alternatively, a move above $1500 can also be used to enter long positions, although volatility could mess up the trade. Hence managing the trade would be particularly important.
The near-term sentiment was firmly in favor of the bulls
The Open Interest (OI) chart noted massive gains over the past three days. It climbed from $90 million to $130 million, and the spot CVD also registered respectable gains. The OI showed speculators in the futures markets retained their strong bullish conviction.
Realistic or not, here’s MKR’s market cap in BTC’s terms
The rise in spot Cumulative Volume Delta (CVD) highlighted demand in the spot markets and was an encouraging development. It made MKR’s rally past $1500 more credible.