Maker[MKR] has been moving up for the past 72 hours. The recent rise caused the liquidation of short positions.
Short sellers were forced to hedge their bets on Maker [MKR], after the asset experienced a sudden and dramatic price increase. The MVRV has changed position due to the recent price movement, so it is overvalued.
Maker’s [MKR] movement had increased before 2 February. As of press time, it had climbed by 17.21%, which meant that it had increased by approximately 29% during the previous four days. But at the time of writing, it was trading at about $882 and had lost more than 4% of its value.
However, Maker [MKR] continued to exhibit positive momentum on the daily time frame despite what appeared to be a price decline.
The Relative Strength Index (RSI) was still heading above 60 and above the neutral line. In addition, it was clear that the price decline had caused a price correction. The drop caused the RSI to leave its previous overbought zone.
Short Positions Suffer Liquidations
According to CoinGlass data, in the past 24 hours, traders who bet on price movements have liquidated nearly $444,000 worth of short positions.
By comparison, investors only liquidated $27,000 worth of long positions in Maker (MKR) during that time. Short sellers who are forced to cover their positions usually lead to a sharp increase in prices.
MVRV and TVL Flash Positive Signs
Based on its market value to realized value ratio, Maker has been overvalued since the beginning of the year (MVRV).
At the time of writing, the asset was high in the overvalued area because the 30-day MVRV was about 13.75%. Even though the current position is lucrative for investors, it was still expensive to take a new position.
Total Value Locked on Maker (MKR) reflects the favorable pricing trend of MKR. According to one observation, the TVL recovered briefly in January. The TVL of the network stood at 7.23 billion, according to DefilLlama.
Annual Fee Down, Debt Ceiling Up
In response to feedback from the most recent round of the executive voting survey, Maker announced on March 1 that a new pricing structure had been implemented.
According to the announcement, the most recent annual fee was now 0.5%. The debt ceiling was also raised from DAI 5 million to DAI 10 million, signaling a reduction in borrowing restrictions.
It is worth mentioning that according to Santiment, MKR’s weighted sentiment fell deeper into the negative territory.
Following Santiment’s insights, short-term selling pressure increased, as evidenced by an increase in supply on exchanges, indicating that more MKR tokens were sold as investors looked for short-term gains. If the trend continues, MKR might not close above $915, giving the bears more leverage in the market.
By Audy Castaneda
