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Maker DAO (MKR) Loses 25% Following 100% Rally in February: Here's Why

Wed, 04/05/2023 - 17:00
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Arman Shirinyan
Presence of buying support on market did not lead to prolonged rally on Maker as token experiences serious troubles
Maker DAO (MKR) Loses 25% Following 100% Rally in February: Here's Why
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The Maker (MKR) cryptocurrency has seen a sharp decline of 25% in its value after experiencing an impressive 100% rally in March. This sudden drop in value could be attributed to a combination of technical and fundamental factors that are currently affecting the digital asset. Interestingly, the CEO of the project has been selling all of his assets in favor of MKR, which has contributed to significant buying support for the token.

Decentralized Autonomous Organizations (DAOs), like Maker, often face increased pressure due to the financial structures that govern them. A large portion of tokens is typically held by retail investors, which can lead to market volatility. This increased pressure on DAOs may be one of the factors contributing to the recent decline in Maker's value.

MKR chart
Source: TradingView

In addition to the challenges that DAOs face, technical factors may also be playing a role in Maker's recent price drop. Technical analysis can be a helpful tool in understanding market trends and predicting future price movements. In the case of Maker, technical indicators may have been pointing toward an overbought scenario after the 100% rally, leading to a subsequent 25% correction.

XRP getting ready for swing

XRP, the native cryptocurrency of the Ripple network, could potentially see a 40% increase in value if the Relative Strength Index (RSI) continues to show a continuation pattern, building on the 40% rally witnessed earlier. A continuation of the rally would mark an even more impressive comeback for XRP, which has been one of the strongest-performing assets in the industry recently.

The initial catalyst for XRP's boost in value has been a rumor suggesting a possible resolution of the ongoing SEC case in 2023. This legal battle has been a significant source of uncertainty for Ripple and XRP investors, and any indication of a positive outcome could provide a much-needed boost in confidence for the digital asset.

In addition to the potential resolution of the SEC case, the cryptocurrency market has been experiencing a broader rally. This market-wide surge has also contributed to XRP's impressive performance, as investors continue to show interest in digital assets across the board.

Ethereum on watch

Ethereum, the world's second largest cryptocurrency by market capitalization, has recently made a significant breakout, surpassing the $1,900 mark and moving closer to the $2,000 level. This price movement is noteworthy as it occurs ahead of the anticipated staking contracts unlock, which could potentially lead to increased selling pressure on the market.

The Ethereum network has seen a growing number of users participating in staking their ETH tokens, contributing to the network's security and earning rewards in the process. As the staking contracts are set to unlock soon, many investors are speculating that this might be the calm before the storm, as the event could trigger a spike in selling pressure.

Ethereum (ETH) vs. Bitcoin (BTC) Chart Indication Might Mean This for Altcoins: Miles Deutscher

While the unlock may temporarily affect Ethereum's price, it is essential to consider the broader implications of this event. The staking contracts unlock could lead to a more significant distribution of ETH tokens among holders, contributing to increased decentralization and stability for the network. Furthermore, as more users gain access to their staked assets, Ethereum's liquidity may improve, potentially attracting additional investors.

It is also worth mentioning that Ethereum continues to innovate and develop its ecosystem, with the upcoming Ethereum 2.0 upgrade promising to enhance the network's scalability and efficiency. Such advancements could attract even more users and developers to the platform, further solidifying Ethereum's position as a leading smart contract and decentralized finance (DeFi) platform.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.