MKR, the governance token of MakerDAO, has witnessed a 10% price uptick over the past 24 hours. It’s currently trading at a weekly high of $1,224.
The recent double-digit rally has led many futures traders to take long positions, expecting a continued price rise. However, this surge may fall short of countering the looming risk of liquidations. Here’s why.
Maker Records Gains
MKR has maintained a downward trend since July, when a death cross pattern was formed. This pattern is formed when an asset’s short-term moving average (50-day small moving average) crosses below a long-term moving average (200-day small moving average).
The death cross serves as a bearish signal that reflects a shift in market sentiment from bullish to bearish and highlights weakening momentum in the asset’s price. Traders interpret this crossover as a sign of potential price decline, which has led MKR holders to increase their selling activity.
Read More: What Are Tokenized Real-World Assets (RWA)?
The altcoin’s price has declined 22% in the past month, placing MKR at a 13-month low. Key technical indicators suggest this downtrend may persist; for instance, its Bull Bear Power has remained sharply negative in recent weeks.
This indicator measures market momentum by comparing the strength of buyers and sellers. A predominantly negative reading reflects weak buyer activity. It suggests buyers cannot push prices above recent highs, indicating a lack of demand or confidence in the market.
Long Traders Face Liquidation Risks
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Author: Abiodun Oladokun
