MKR surged 10% to $1,224 but faces risks from potential long liquidations.
A death cross pattern signals ongoing bearish sentiment and declining buyer confidence.
Sustained buying pressure is needed for MKR to break the $1,683 resistance level.
MakerDAO (MKR), recently jumped 10% in just 24 hours. This surge brought the token to a weekly high of $1,224. However, beneath this rally lies a potential risk of long liquidations that could disrupt momentum. Traders now stand at a crucial crossroads. Will MKR keep rising, or will market volatility pull prices down?
Maker Records Gains
Source: Trading View Since July, MKR has struggled, marked by a death cross pattern. This occurs when a short-term moving average falls below a long-term moving average. Traders see this as a bearish signal, indicating a shift in sentiment and fading momentum. Many holders have chosen to sell, fearing further declines.
In the past month, the altcoin's price dropped 22%, reaching a 13-month low. Key technical indicators suggest this downtrend may continue. The Bull Bear Power metric remains sharply negative, measuring market momentum by comparing the strengths of buyers and sellers. A negative reading signals weak buyer activity and a lack of confidence among traders.
Long Traders Face Liquidation Risks
MKR's decreasing open interest highlights market uncertainty. Currently, open interest sits at $81 million, down 12% since the beginning of the month. Open interest tracks unsettled derivative contracts. A decline usually points to reduced market participation as traders close positions to realize profits or cut losses.
Despite the drop in price, many futures traders still chase long positions. Positive funding rates, at 0.014%, indicate this trend. According to Coinglass, the MKR long/short ratio hit a monthly high, with long positions making up nearly 50% of the volume. In just 24 hours, long volume reached an astonishing $42.07 billion.
This situation often suggests bullish sentiment, but the imbalance between long and short positions creates risks. With ongoing bearish sentiment around MKR, long positions face the threat of liquidation. Currently trading at $1,224, MKR bounced back from a support level of $1,032. Fibonacci retracement levels suggest a potential target of $1,683 as a critical resistance point.
To break through this level, MKR requires sustained buying pressure. If successful, the altcoin could soar past $2,000 for the first time since August. However, if bearish sentiment returns, MKR risks losing recent gains and could drop back to the support level of $1,032. This scenario raises concerns about the durability of MKR's upward momentum.
The post Maker Climbs 10%, Will Long Liquidations Halt MKR’s Momentum? appeared first on Crypto News Land.
