Maker’s (MKR) 10% Surge Might Not Overcome the Threat of Long Liquidations

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.

MKR Death Cross. Source: TradingView

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.

MKR Bull Bear Power. Source: TradingView