Key Highlights:
- Massive MKR price crash after the entire crypto market plummeted
- MakerDAO is currently in a $4 million bad debt
- The community of MakerDAO is currently trying to decide what to do to solve the problem
| Maker price | $275 |
|---|---|
| Key MKR resistance levels | $325, $300, $368 |
| Key MKR support levels | $255, $175 |
*Price at the time of publication
Maker is in a small 4-hour uptrend after a huge price drop of around 60%. The digital asset is currently trying to extend this uptrend but further downside action could be coming due to MakerDAO’s situation and its $4 million bad debt.
MKR Technical Analysis
What has been going on?
MKR saw a massive 60% price crash two days ago as the whole crypto market plummeted. The entire market has been clearly following the steps of the traditional stock markets which has also experienced terrible crashes.
MKR traded as low as $175 but yesterday bounced back to $325, almost a 100% price increase. Unfortunately, the digital asset and DeFi leader has more problems. Yesterday, MakerDAO was facing an emergency shutdown with around $4 million in bad debt.
Because Ethereum price also plummeted and lots of vaults got undercollateralized. Unfortunately, due to network congestion and more issues, liquidators were able to bid zero and still win the vault but MakerDAO got nothing out of those liquidations.
Right now the whole MakerDAO community is in the middle of a debate to decide what to do with the current debt and how to stop it from happening in the future. Currently, it’s unclear what the next step for MKR is and unfortunately, this situation is also affecting its price. In fact, MKR has been one of the weakest cryptos during the recent market crash.
MKR price short-term prediction: Bearish
Not only MKR is facing a lot of problems but the whole crypto market has crashed losing billions. The current MKR bounce from $175 is slowing down with a 19% price drop today. The 4-hour chart is currently in an uptrend but the price has been rejected two consecutive times from the 12-period EMA.
The bulls are now looking to set a higher low compared to $231 and continue with the 4-hour uptrend above the high at $325. The RSI was extremely overextended and dropped down to 11 points before the bulls were able to set the bounce. It is currently still only at 35 points. The longer time frames like the weekly and monthly charts are now in significant downtrends as well.
Where is the resistance towards the upside?
If there is one good thing about sudden and huge drops, it is the fact that bears are not able to set a lot of resistance on the way down. MKR is not really facing a lot of resistance besides the 4-hour high at $325, a few EMA resistances at $300 and $368 and then $534.
Unfortunately, the sell-off was caused by the global economy crashing due to coronavirus fears. This means that most technical indicators are not as useful now.
What are the technical indicators showing?
Most indicators are definitely bearish, the MACD has turned bearish on the daily chart and pretty much all moving averages, including SMA’s and EMA’s, are all indicating to sell. The RSI is still in the oversold area on the daily chart and really close to it on the weekly chart.
Again, as stated above, it’s important to realize that in times of major global economic crisis, technical indicators are not as reliable and another massive sell-off could happen at any time if the coronavirus keeps spreading and affecting industries.
Previous MKR price analysis
At CoinCodex, we regularly publish price analysis articles focused on the top cryptocurrencies. Here’s 3 of our most recent articles about the price of Maker:
