MKR sees large sell-offs; will traders stay put in the face of this adversity?

Whales selling MKR may impact token’s value

In recent days, MKR, the governance token of MakerDAO, has experienced a correction as whales begin to sell off their holdings. This has raised concerns among investors who were previously optimistic about the token’s growth.

Whales shy away

A well-known crypto trading platform, FalconX, has been observed offloading a significant amount of MKR. Over the past week, FalconX moved 9,085 MKR, worth $12.8 million, into OKX and Binance. Currently, they still hold 7,261 MKR, equivalent to $10 million.

This selling activity by FalconX can have both positive and negative effects on MKR’s price. On one hand, reduced supply due to increased demand could drive up the token’s value. On the other hand, if traders become cautious due to FalconX’s actions, it might lead to a decrease in MKR’s value.

Since October 24, MKR’s price has declined by 11.78%. However, when considering the larger picture, the price has been relatively stable. At the time of writing, MKR was trading at $1418.29.

The Chaikin Money Flow (CMF) and Relative Strength Index (RSI) indicate that money flow and momentum slightly favor the sellers, suggesting a potential downward pressure on MKR’s price.

Where do the metrics stand?

Two important metrics, Network Growth and MKR’s Velocity, have shown a decline. This indicates a decrease in interest from new wallets and a drop in the token’s trading volume over the past few days.

Furthermore, the Market Value to Realized Value (MVRV) ratio of MKR has started to fall. This suggests that most token holders would incur a loss if they choose to sell now, reducing the selling pressure on the market. It also implies that the likelihood of further price decline is low, as holders are more likely to sell MKR at a profit.

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Overall, the recent selling activity by whales and the decrease in various metrics raise concerns about MKR’s future performance. It remains to be seen how the market will react and whether investor confidence in the token can be restored.

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By Team