It surged by an impressive 120% from June to August, experienced a minor setback, and has once again resumed its upward trajectory with a 38% increase from its August low, returning to levels reminiscent of its August high.
As it continues to make significant gains and approaches a potential new yearly high, the question arises: Will we witness a distinctive new high or just a slight variation before the price potentially reverses course?
Back on June 18 of the previous year, MKR’s price took a significant dip, plummeting to $656. This marked the end of a steep decline from its all-time high of $6,334, representing a staggering drop of nearly 90%.
Subsequently, MKR entered a prolonged consolidation phase, establishing a horizontal trading range that stretched from the $600 mark to its upper boundary of $1,200, initially reached on August 10 of the same year.
These support and resistance levels underwent multiple tests, with the price fluctuating slightly higher or lower before reverting within the established range.
However, for the first time in over a year, a significant breakout attempt occurred, and notably, it transpired on the upper boundary. On June 10, the price interacted with the support level, initiating an upward trajectory, and on August 2, it breached the resistance level, reaching its highest point at $1,368.
Although a brief excursion above resulted in a pullback to just below $1,000 on August 25, a fresh breakout attempt is currently in progress, with the price recently reaching $1,360 at yesterday’s peak.
At present, it sits marginally lower, resting near the upper resistance level, presenting two potential scenarios ahead.
The first scenario is a bullish one that began in January when the price rebounded from the $600 support, signaling the inception of an impulse wave. In this interpretation, the wave that commenced on June 10 represents wave 3, as it reached the 1.618 Fibonacci extension level of wave 1.
Subsequently, the decline observed from August 2 to 26 is categorized as wave 4, while the recent upward momentum constitutes wave 5.
Initially, there was a possibility that the three waves observed since January might have constituted an ABC correction. However, this hypothesis seems less likely now, given the subsequent upward movement that began on August 26, which effectively recovered to previous high levels. Consequently, the more plausible scenario remains the bullish one.
Examining the 1-hour chart and scrutinizing the wave structure underlying the recent ascent, it appears that it may have concluded, characterized by a five-wave pattern. Alternatively, there might be room for one final push upward, but the potential for further gains seems limited.
Considering that the larger impulse wave that originated on January 1 may have completed, it suggests that we could be on the brink of a correction of equal magnitude, potentially guiding the price back toward the $900 range.
This correction could mark the first higher low in a new bullish trend, setting the stage for MKR’s price to embark on a multi-year ascent.
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.