By Franklin Smith
Maker DAO (MKR) was among the top-performing tokens within the past four weeks. Bulls have controlled the space during this timeframe, though several factors indicate a potential break by the bulls.
While publishing this content, MKR changed hands near $1,116, indicating an 89% surge from the recent local low at $581. Attractive bullish performance over the past week saw the alternative token outshining many in the cryptocurrency space.
Nonetheless, MKR’s upside strength was about to pause. Thus, market players should consider impending selling momentum. One factor supporting the mentioned expectation is MKR stood at a longer-term descending resistance level.
The latter remained active since August last year, confirming its strength. Surprisingly, MKR has had its price action crossing beyond the descending resistance zone over the past two days. That led to limited upswings.
The lucrative rally pushed MKR’s price into the overbought region. Moreover, the token’s MFI (Money Flow Index) indicated that liquidity flew out of the asset. That means some holders have cashed out their MKR.
MKR was yet to record substantial declines during this publication, regardless of MFI’s outflow tale. That might be due to demand presence canceling the selling pressure. Moreover, MKR could favor bears after the demand fizzles out.
Will Bears Take Over?
Several on-chain indexes highlighted increased selling pressure following resistance retest. For instance, MKR’s age consumed index recorded its highest 4-week surge over the past 24 hours. That showed a massive toke amount moved in that timeframe.
Nevertheless, the token’s mean coin age index plummeted toward monthly lows over the past day. That indicated more coins moved lately. Also, it matched the selling momentum around the overbought region or resistance territory.
Assessing supply dynamics revealed MKR faced massive emerging sell momentum. The supply by leading addresses increased substantially between October 12 and 17. Moreover, the metric indicated massive outflows over the past two days.
The supply by leading address declined to nearly October 12 zones. If we utilize this to measure the anticipated impending decline, MKR’s price could plummet beneath $900 within the coming few days.
The retail sector will ultimately mimic top whales/addresses, translating to massively selling momentum. Though this is highly potential, MKR traders should watch the macro picture.