Maker price risks further decline as whale transactions spike, MKR wipes out recent gains
- Maker noted a spike in whale transactions greater than $100,000, coinciding with rising supply on exchanges.
- MKR price wiped out its gains from the past week as selling pressure on the Ethereum-based token increased.
- MKR price is likely headed toward a further decline with rising transaction volume and whale activity.
Maker (MKR), a utility and governance token on the Ethereum blockchain, has witnessed a sharp increase in whale transaction activity over the weekend. There are several factors likely driving this increase in large volume transfers in MKR.
Ethereum creator Vitalik Buterin shed nearly $580,000 in his MKR holdings as the protocol considers moving to Solana or a native blockchain. The controversy surrounding MakerDAO, coupled with bearish on-chain metrics, is likely driving the asset’s price lower.
Also read: Arbitrum proposes 75 million ARB distribution, critics worry about impact on ARB price
Maker whales take profits, pushing MKR price lower
Maker has witnessed a large volume of whale transfers, based on data from on-chain intelligence tracker Santiment. Between August 28 and September 4, MKR’s whale transfers, valued at $100,000 or higher, climbed from 14 to 37.
Whale transaction count is a metric that measures the volume of transfers valued at $100,000 or higher. Combined with the impact on the asset’s price, this metric fuels a bullish or bearish narrative. When a large number of whale transfers are followed by price decline, it implies whales likely transferred their holdings to centralized exchanges to book profits.
In response to higher volume of large transfers, MKR price wiped out its gains over the weekend. Another key on-chain metric is the supply on exchanges.
In the case of Maker, the supply on exchanges metric adds credence to the bearish thesis for the Ethereum-based token. MKR’s supply climbed from 102,420 tokens to 110,920, an 8.2% increase, indicating tokens are being moved to centralized exchanges and traders are likely to sell.
 [14.49.01, 04 Sep, 2023]-638294180188594958.png)
MKR whale transfers, valued at $100,000 or higher (yellow), valued at $1,000,000 or higher (blue), supply on exchanges
The spike in these on-chain metrics, increasing supply on exchanges, and whale transaction activity imply that MKR is trending among traders. There are bearish cues, however, and so the MKR price could drop lower.
MKR controversy: MakerDAO endgame, Vitalik Buterin’s MKR sale and whale wallet activity
Maker was shrouded in controversy over the weekend when founder Rune Christensen proposed a fork of the Solana codebase for Maker and explained that the project’s endgame is to migrate to its own native blockchain.
The last phase of Endgame is the launch of a native blockchain for Maker with the codename NewChain
— Rune (@RuneKek) September 1, 2023
It will make the ecosystem more secure and efficient
After some research, I believe the Solana codebase should be considered as the basis for NewChainhttps://t.co/KyGxBBGlVH
In response to the comments, Buterin shed nearly $580,000 worth of MKR holdings. This likely merged as a factor fueling a bearish narrative among traders. What’s more – a recent spike in exchange outflow was noted in MKR. This can be explained by a withdrawal by a large wallet investor on Binance.
MKR withdrawal from Binance by a large wallet investor on September 4
Impact on MKR price
MKR price has risen 5%, now trading at $1,134, since August 28. MKR has wiped out its 12% gain noted within the first three days of the past week, and the Ethereum-based token is likely headed for a further decline on Binance.
MKR price could find support at $1,084, close to levels previously seen on August 28 and wiping out its weekly gains entirely. It remains to be seen whether MKR recovers due to a number of bearish on-chain metrics.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Like this article? Help us with some feedback by answering this survey:
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
