Maker Continues Its Ascent — Will MKR’s Bullish Momentum Persist?
Key Takeaways
- Price is up by 50% in September so far.
- Uptrend is likely to end but there is still more room to go.
- A downturn is expected to start soon.
MakerDAO‘s governance token MKR has displayed significant price momentum since August 25, surging by 50%. This bullish trend has been consistent throughout the year, resulting in a new yearly high. The question now is whether this upward trajectory can be sustained in the coming days.
MKR Price Analysis
Analyzing the daily chart, it’s evident that MKR reached its lowest point during the bear market on January 3, plummeting to $505 from its peak of $6,410 on May 1, 2021. This substantial 92% decline could potentially signify the conclusion of its bearish cycle.
Certainly, this notion gains even more weight when we examine the subsequent price action—a substantial and sustained uptrend that has resulted in a remarkable recovery of 195%, calculated from its January low to the current high of $1,486.
The initial significant surge occurred from January until March 8 this year, propelling the price to $991. Subsequently, a retracement ensued, briefly revisiting January’s low before making a resilient daily close at $615 on June 10.
These two distinct waves could plausibly represent the first and second sub-waves within a larger five-wave upward impulse.
If this interpretation holds true, the subsequent surge from June 10 to August 2, when the price reached $1,375, could be its third wave. In August, there was a minor downturn that retested the high area from March, aligning with the characteristics of the fourth wave according to Elliott Wave theory.
Consequently, since August 25, following the conclusion of wave 4 at approximately $1,000, we have been observing the development of wave 5, which is expected to achieve a new higher high.
MKR Price Prediction
According to our chart analysis, there is still a bit more room to go before the completion of this rise but it might be thin.
Taking a closer look at the 4-hour chart and delving into the wave structure since August 25, it’s evident that the lower degree wave 5 is currently unfolding. We may witness its culmination imminently, or given its ongoing impulsive ascent, there’s potential for further upward momentum. Our price target for the completion of this wave five stands at $1,700, representing the next notable resistance to the upside.
However, looking at the bigger picture, we can expect a notable drop in line with the size of the upward movement that started earlier this year. In this situation, we would expect the creation of the first higher low in a bullish cycle, which typically involves an ABC correction. The estimated price target for this correction is currently around $1,000, depending on where the ongoing ascent ends.
Additionally, it’s worth noting that the Relative Strength Index (RSI) is showing the onset of overbought conditions, indicating that the price has become extended.
Conclusion
In the short term, we anticipate the continuation of this upward trend, with a reasonable target set at $1,700. However, it’s worth noting that a potential downturn could initiate soon, given the price’s parabolic ascent, which may lead it into the sellers’ liquidity zone.
While the RSI, as indicated on both the daily and 4-hour charts, suggests that the price has become extended, we have yet to observe clear signs of a struggle. To gain more confidence in the anticipated downturn, we would need to witness the price reaching a peak, encountering resistance, and subsequently undergoing a sharp decline.
Only following such a price action would we be able to project the target of the ensuing ABC correction with greater certainty.
Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
