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Amidst a recovering market, Maker (MKR) faces critical resistance at $1,750, indicating potential bearish trends ahead for traders.
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Recent data reveals that despite a surge in MKR’s price and network activity, underlying market structures suggest caution among investors.
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According to Whale Alert, over $156 million worth of MKR tokens were burned recently, but the expected positive momentum was not realized.
MKR struggles against strong resistance at $1,750 amidst token burns and market fluctuations. Will traders take profits or hold for longer?
Resistance Levels Signal Caution for Maker Traders
The current resistance at $1,750 presents a significant challenge for Maker’s price recovery efforts. Despite witnessing a 60% increase since mid-February, MKR’s recent performance raises questions about sustainability. Evidence of a bearish swing structure on the weekly chart suggests that traders should remain cautious, especially as market dynamics shift.
Active Network Growth Not Enough to Sustain Price
While there has been an uptick in daily active addresses and overall network growth, this spike may not be sufficient to propel MKR through its resistance barriers. Data from Santiment underscores these trends, indicating that the influx of new users did not correlate with strong price momentum. This discrepancy highlights the fragile nature of MKR’s current upswing.
Market Sentiment and Technical Analysis
The technical indicators paint a mixed picture for Maker’s future trajectory. A look at the weekly chart indicates a bearish bias, especially following a sell-off that drove MKR below key thresholds established in October 2024. The recent rebound to the $1,600 area, while encouraging, still encounters formidable resistance, making $1,750 a crucial pivot point.
Bearish Divergence Signals Potential Pullback
Investors should be wary of bearish divergence evident in various technical indicators. The Chaikin Money Flow (CMF) stands at -0.04, indicative of sustained sell pressure. Furthermore, although the MACD hints at an approaching bullish crossover, it remains below the zero line, indicating that bullish momentum is still uncertain.
Implications of Token Burns and Market Reactions
The recent token burn event, where $156.77 million of MKR was removed from circulation, was anticipated to create upward price momentum. However, contrary to trader expectations, this burn did not trigger significant buying interest. This muted response suggests that market participants may be prioritizing profit-taking over speculation at this pivotal juncture.
Strategic Positioning for Traders
Given the overlapping resistance levels and bearish signals on technical indicators, traders may want to contemplate profit-taking as MKR approaches these critical zones. Monitoring lower timeframes for bullish weakness could provide insights for potential re-entries or exit strategies, rather than diving into short positions prematurely. Such a measured approach allows for navigating market volatility with less risk.
Conclusion
As Maker navigates through significant resistance at $1,750, traders find themselves at a crossroads. The combination of recent market activity, technical indicators, and token burns paints a complex picture of Maker’s near-term potential. A prudent strategy involves taking profits while closely monitoring market dynamics before making further commitments in this evolving landscape.
Source: Coinglass
