Maker (MKR) price has declined by 17% since the crypto market rally began around Oct. 23. On-chain analysis uncovers the main MRK price is declining against the positive run of play in the broader crypto markets.
The MakerDAO-issued MRK token price has conspicuously declined sharply since the crypto market flipped bullish. With large institutional investors showing disinterest in MakerDAO’s diverse DeFi ecosystem, here’s the MKR price action to anticipate in the days ahead.
Large Institutional Investors Showing Disinterest in MakerDAO
MakerDAO drew plaudits in August when it announced an 8% yield on DAI savings. However, MakerDAO has conspicuously emerged as one of the biggest mega-cap losers amid the ongoing crypto market rally.
As corporate investors switched attention to Bitcoin and Ethereum Spot ETF applications, the crypto market broke into a bull rally in late October. But since, the native MKR token has witnessed a significant decline in whale demand.
According to on-chain data from Santiment, MakerDAO whales (wallets with balances of 1,000 to 100 million MRK tokens) held a total of 828,000 MKR in their cumulative balances. But after three weeks of selling, the crypto whales now hold only 821,000 MKR as of Nov. 10.
Whales wallet balances metric tracks real-time changes in number of tokens currently held by crypto whales. Valued at the current price of $1,350, the 7,000 MRK tokens offloaded are worth approximately $1 million.
This decline in whale balances implies that corporate investors are exiting the MakerDAO DeFi ecosystem to seek larger profits from more volatile assets. If the whales continue to sell, MKR’s price could struggle to break out of its current retracement phase.
Futures Market Traders Have Shifted $40 Million Away from MKR
Bearish trading activity from MakerDAO derivatives traders is another critical factor behind MKR’s recent price decline. According Coinalyze, investors have shifted a sizable amount of capital away from MKR Futures Contracts amid the crypto market rally.
When crypto market rally began around October 23–24, the MKR Open Interest was around $96 million. As of Nov. 10, that figure has dwindled to just $54.5 million.
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This shows that derivatives traders have rapidly withdrawn $41.5 million in capital from MKR futures contracts within the last three weeks.
In the context of crypto perpetual futures, Open Interest represents the total value of unsettled trading contracts for a particular asset. Typically, a decline in Open Interest implies that more MKR investors are closing out their positions than new market entrants bringing in fresh capital.
A persistent decline in open interest, during a bearish trend suggest that investors currently have low confidence MKR’s short-term price prospects.
Drawing inferences from the crypto whales selling MKR, and futures traders exiting their positions, MKR price is likely to drop further in days ahead.
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MATIC Price Prediction: Losing $1,200 Support Could Trigger Larger Losses
From an on-chain standpoint, the rising whales’ sell-off and massive capital outflows from derivatives markets are major drivers behind the ongoing MakerDAO price correction. With these indicators still trending bearish, it puts MKR short traders on the cusp of further gains.
The Global In/Out of the Money (GIOM) data, which groups the current MakerDAO investors according to their entry prices also confirms this prediction.
It, however, shows that the bears must break down the initial support buy wall at $1,200 to remain in control. As depicted below, 6,610 holders bought 107,590 MKR tokens at the average price of $1,197. If those investors HODL firmly, they could trigger an MKR price rebound.
But if the bears can push aside the buy-wall, the MakerDAO price will likely drop toward the $1,000 area as predicted.
Still, the bulls could negate the pessimistic prediction if MKR price can reclaim $1,500. But, in that case, the 11,230 MATIC holders that bought 164,130 MKR at the minimum price of $1,415 could mount a resistance wall. If those investors sell early, MKR price will likely enter another retracement.
Disclaimer
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