- May 27, 2022
The manufacturer’s price (MKR) may soon fall
The Maker price has been in consolidation mode in recent days as investors assess the strength of the DeFi industry and its stablecoin Dai. MKR is trading at $1,544, which is in the same range as recently. That price is up more than 64 percent from its low last week. It has now grown to more than $1.4 billion, making it the 51st largest coin in the world.
MKR rally collapses
Maker is the largest DeFi platform in the world with more than $10.5 billion blocked in its ecosystem. It is a decentralized autonomous organization (DAO) that allows people to generate a stablecoin known as a Dai by leveraging collateral assets provided by Maker Governance.
Dai is a stablecoin that is relatively different from Tether and USD Coin. Unlike these two, it is backed by the US dollar. However, it is decentralized in nature, and its collateral assets are deposited in private vaults.
The Maker price has risen sharply in recent days as investors have embraced Dai after the collapse of Terra LUNA, Terra USD and affiliated DeFi networks like Anchor Protocol and Astroport. Over the past few days, Dai’s total market capitalization has jumped to more than $6 billion, making it the 17th largest coin in the world. It has become the third largest stablecoin in the world after Tether and USD Coin.
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Still, a closer look at its ecosystem shows that people withdrew their money from the network after Terra collapsed. Its total locked-in value (TVL) in the network fell to about $10.5 billion, which is the lowest since July last year. At its peak, it had a TVL of more than $20 billion.
Manufacturer’s price prediction
The four-hour chart shows that the MKR price has moved sideways over the past few days. The coin moved slightly above the 25-day moving average, while the relative strength index and the stochastic oscillator fell.
However, a closer look shows that the coin has formed an ascending wedge pattern, which is usually a bearish sign. Therefore, Maker’s outlook is bearish, with the next key support level to watch being $1300. A move above the resistance level at $1,650 will invalidate the bearish view.