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Maker (MKR) Price Action Sends Short Traders into Profit – What’s Behind it?

3 mins
Updated by Ryan Boltman
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In Brief

  • The MakerDAO-issued MRK token price has significantly declined, with large institutional investors showing disinterest in the diverse DeFi ecosystem.
  • On-chain data reveals that MakerDAO whales now hold only 821,000 MRK as of Nov. 10, signifying a decline in corporate interest in the DeFi ecosystem.
  • A significant amount of capital has been shifted away from MKR futures contracts amid the crypto market rally, contributing to MKR's recent price decline.
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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. 

MakerDAO (MKR) Whales Wallet Balances
MakerDAO (MKR) Whales Wallet Balances | Source: Santiment

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. 

Read more: 9 Best Crypto Futures Trading Platforms in 2023

This shows that derivatives traders have rapidly withdrawn $41.5 million in capital from MKR futures contracts within the last three weeks.

MakerDAO (MKR) Open Interest
MakerDAO (MKR) Open Interest | Source: Coinalyze

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. 

Read More: Crypto Signals: What Are They and How to Use Them

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. 

MakerDAO (MKR)  Price Prediction | GIOM data
MakerDAO (MKR)  Price Prediction | GIOM data | Source: IntoTheBlock

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.

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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Ibrahim Ajibade
Ibrahim Ajibade Ademolawa is an experienced On-chain research analyst who began his career in Commercial Banking. He has worked with several Web3 startups and financial institutions —analyzing technical concepts and spectacular events that link the DeFi and TradFi worlds. He holds a Bachelors’ Degree in Economics and is currently pursuing an MSc. in Blockchain & Distributed Ledger Technologies.
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