Home CryptocurrencyAltcoin Decoding MKR’s price action after MakerDAO burn activity hit highs

Decoding MKR’s price action after MakerDAO burn activity hit highs

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Decoding MKR’s price action after MakerDAO burn activity hit highs

  • The MakerDAO burn strategy was in one of its most active states. 
  • MKR’s momentum could eventually become bearish.

Decentralized Finance protocol and builders of DAI, MakerDAO [MKR] have been involved in burning its tokens as part of its tokenomics strategy. This fascinating activity has been happening since 2018. And, in turn, has helped MKR holders increase their voting ability and decrease spending costs.

Realistic or not, here’s MKR’s market cap in BTC’s terms

Burn in the system

While the buyback and burn process may have not yielded notable results over the past months, its recent trend seems to have changed. According to Makerburn.com, about 5.8 billion MKR tokens had been burned at press time. 

This was an improvement from the levels of 2022. Hence, collateral under Maker Protocol increased supply with the increasing percentage in locked assets. This also implied that the DAI demand and supply would have got more balance.

Meanwhile, data from DeFiLlama showed that the MKR Total Value Locked (TVL) remained in second position despite its 1.79% increase in the last 24 hours. As of this writing, Lido Finance [LDO] was ahead of it with almost a $1 billion difference.

Be that as it may, the increase meant that the overall health of the Maker Protocol was excellent while active users have been exceptionally robust.

With respect to the MKR price, CoinMarketCap showed that its 30-day performance was 22.43%. 

Per the development activity, Santiment revealed Maker had consistently improved to 17.02. This could be attributed to the several proposals that have been approved in recent times. Hence the MakerDAO development team was at one of its highest stages of briskness.

Additionally, its 24-hour active addresses had also improved to 292. This indicated that an excellent number of crowd interactions and speculation around the MKR token was relatively rampant.

MKR development activity and active addresses

Source: Santiment

Read MakerDAO’s [MKR] Price Prediction 2023-2024

High volatility for MKR

Per its price action, the daily chart showed that MKR’s volatility was way over the contraction of the first weekend in January. 

At press time, the Bollinger Bands (BB) showed that MKR was neither at an oversold nor in the overbought region. This was because the MKR $665.12 price was off the upper and lower bands.

In addition, indications from the Moving Average Convergence Divergence (MACD) showed that MKR’s momentum was mainly bullish.  However, the MACD had a tendency to fall to the bears as the orange dynamic line approached a level to surpass the blue line.

In a case like this, sellers would regain control of the market momentum. So, there is a chance that the MKR price decreases from its current value.

MKR price action

Source: TradingView

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