Maker MKR Token Jumps 40% But Analysts Say Correction Is Imminent
The Maker MKR token jumped by 40% recently but the altcoin seems like it’s ready for retracement despite the massive gains reached overnight. In today’s Maker MKR news we find out more about the price analysis.
The DeFi market sector is booming and looking at the token rankings, we can see that the top 10 altcoins by market cap are posting massive gains except for DAI since it’s a stabelcoin. Among all of the surging cryptocurrency tokens in the DeFi space, Maker MKR token is up by 30% in the past day. Despite the significant bullish impulse that MKR went through, the different on-chain and technical metrics suggest that it is poised to retrace soon.
The Tom Demark Sequential index supports the idea that Maker is bound for a correction as the indicator presented a selling signal in the form of a green nine candlestick on the 3-day charts. The bearish formation estimated a one to four three-day candlesticks correction before starting another uptrend. The TD setup was incredibly accurate at predicting the local tops and bottoms based on the historical data. Looking at the charts, it even presented a selling signal in February before the prices crashed by 75%. The current pessimistic forecasts have to be taken seriously no matter the hype around the rally.
It’s also worth mentioning that each time a TD setup presented a selling signal within the time frame, the bearish outlook was confirmed by a sell order spike. Given the recent price action, it’s likely that the decentralized governance token is in overbought territory. The IOMAP model confirms the bearish outlook. The on-chain metric reveals that for MKR to advance further, it has to turn the $845 resistance into support. The supply wall could have the ability to hold against upward pressures because the holders within the range will try and break even if an upswing happens. If it goes past it, it will increase the odds for the DeFi Token rise to $900 or higher.
On the flip side, the IOMAP charts show that If a correction happens, the most critical support level will be at $705. More than 720 addresses are holding more than 14,200 MKR altcoins so investors are trying to remain profitable in the long positions and will even buy more tokens to avoid seeing these investments into losses.