MKR holders who boarded at the end of September are happy with their decision given the good ramp-up over the past two weeks. The Maker DAO native token has earned its way into the top gainers list after a 43% surge from its September lows.
MKR’s current upside has been supported by Maker DAO’s stabilizing Total Value Locked (TVL). The latter peaked at $19.75 billion in early December 2021, but has fluctuated since then. Beginning in April, it went into free fall as seen in the DefiLlama chart below.
Source: Defillama
TVL outflows were angered by FUD triggered by May’s LUNA and UST crash. This result reflects the impact of bull and bear markets on the total value tied up in credit pools and liquidity logs.
Protocols, bridges, and credit pools require a lot of liquidity to function.
Unfortunately, unexpected market events that trigger a market crash tend to result in outflows from the liquidity pool. The crash of UST and LUNA in May are ideal examples of cases impacting the Total Logs Value (TVL).
On the run from the bears
Maker DAO’s TVL was hit hard when the second-quarter market crash forced many investors to withdraw their funds. Fortunately, the protocol’s TVL has stabilized in recent weeks.
So much so that it started this week as Ethereum’s largest protocol from TVL.
Maker DAO’s TVL rating reflects some on-chain observations. For example, MKR supply in smart contracts fell from a 6-month high of 45.52% (of MKR circulating supply) in late April. By mid-June it had fallen to 39.38%.
Source: Glassnode
Meanwhile, most of MKR’s supply was still held by the top 1% of addresses. Contrary to most of the metrics above, supply of top 1% addresses was the only metric to show inverse performance over the last six months.
Top addresses increased their balances from 95.63% to as much as 95.96% in the six months.
Additionally, the supply from the top 1% of addresses confirmed that whales were taking advantage of the situation and boosting their balances during the turmoil.
MKR’s price was trading at $0.81 at press time, a significant rebound from its 2022 low of $0.31. It is up 7.81% since early October at press time.
Source: TradingView
Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) have been showing higher strength over the past few days. Investors should also expect some selling pressure as the price approaches overbought territory.
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