Maker recently surged past its long-term descending trend line to signal that a reversal from the drop is due. Price appears to be hitting a ceiling, though, so it might need to make a correction before heading further north.
Using the Fib retracement tool on the latest swing low and high shows that the 61.8% level is close to the broken trend line and an area of interest at $500. This is also just above the dynamic inflection points at the moving averages.
The 100 SMA looks prime for a bullish crossover from the 200 SMA to signal a return in bullish momentum and a continuation of the climb. However, stochastic is already in the overbought region to show that buyers are feeling exhausted and could let sellers take over. Once the oscillator turns south, Maker price might follow suit and find support around any of the Fibs.
A shallow correction could find support at the 50% Fib around $560 or the 38.2% level at $620. If any of these areas keep losses in check, Maker could make its way back up to the swing high or higher. RSI is already indicating overbought conditions, too, so it may be high time for a pullback.
The recent surge in Maker is being attributed to the purchase of 6% of MakerDAO by Andreessen Horowitz’s a16z crypto and news of Augur adding Maker to its platform. Some say that it is also because of an increase in supply of its related DAI stablecoin, which has reached up to nearly 60 million coins, higher by 5 million coins in the past week alone.
Of course, it’s also worth remembering that low liquidity conditions for this lesser-known altcoin also provided good conditions for a big move. Maker is supported by its own ecosystem of staking, loans, and the issuance of DAI dollar-pegged coins. It does not rely on banks to provide stability but instead depends on Collateral Debt Positions.
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