• Fri. May 24th, 2024

MakerDAO (MKR): Can Latest Development Push MKR Towards Next Bullish Rally?

Lisa Reyes

ByLisa Reyes

Oct 5, 2022

MakerDAO (MKR) holders that persisted during September’s final session could be pleased with their strategy as the alternative token recorded impressive upsides within the past two weeks. The alternative coin joined the list of leading gainers, following its 43% surge from September lows.

The current MKR upside emerged after MakerDAO stabilized its TVL (total value locked). The latter hit a $19.75 billion high in early December 2021 before persistent fluctuations. It recorded free fall since April (according to the DeFiLlama chart).

The FUD following the UST and LUNA May debacle exasperated the total value locked outflows. That reflects the effect of bear and bull markets on THV in liquidity protocols and lending pools. Remember, lending pools, bridges, and protocols need massive liquidity to operate.

Unfortunately, unanticipated market events that catalyze market crashes tend to trigger outflows in liquidity pools. The May LUNA and UST crash represents instances impacting the protocol’s TVL.

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Dodging Bears

MakerDAO’s total value locked took a massive blow amid the Q2 market crash that had most investors withdrawing their funds. The best thing is the protocol saw its TVL stabilizing over the past few weeks. The impressive actions saw it joining this week as ETH’s leading protocol by total value locked.

MakerDAO’s total value locked analysis shows some on-chain moves. For instance, the token’s ‘smart’ contracts supply plummeted from 45.52% (of total circulating supply) (six-month high) during the April-end session.

The index plunged towards the 39.38% low as of mid-June. Meanwhile, the top 1% addresses held most of the token’s supply. Unlike the discussed metrics, the 1% address supply remained the only index that recorded an inverse performance over the past six months.

Furthermore, the 1% metric showed that whales capitalized on the situation, increasing their holdings amidst the turmoil. While writing this post, MKR changed hands at $0.81, representing a substation revival from the 2022 low of $0.31. The alternative token has gained 7.81% since early October.

The Relative Strength Index and the Moving Average Convergence Divergence confirmed improved strength within the past few days. Also, investors should anticipate some selling momentum in the coming times as the token nears the overbought region.

Lisa Reyes

Lisa Reyes

Lisa Reyes is a skilled and experienced news writer known for her compelling storytelling and in-depth research. With a dedication to delivering accurate and informative news coverage, her articles provide readers with a comprehensive understanding of current events.

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