MakerDAO (MKR) shows promising signs of a strong rebound after a recent 2% price gain. With a 10% increase over the past week, MKR is positioned to break out of a four-month decline.
If it moves above a key descending trendline, the price could rally up to 40%, supported by bullish signals from on-chain data.
MKR’s Potential Rally Hinges on Trendline Breakout
MakerDAO, the platform behind the DAI stablecoin, has seen its price bottom out near lows last seen in August 2023. Currently, MKR is testing the upper boundary of a falling wedge pattern, a bullish setup often signaling a price reversal. A breakout above this wedge, particularly above $1,450, could push MKR to $1,721, marking a 40% increase as buying pressure builds across the broader crypto market.
To solidify this move, MKR must break the $1,441 resistance, where the 50-day, 100-day, and 200-day Simple Moving Averages converge, reinforcing the challenge.
Momentum Indicators Suggest Bullish Continuation
Momentum indicators support the bullish outlook. The Relative Strength Index (RSI) and its moving average (SMA) are at their midline, and crossing above could amplify the uptrend. Additionally, the Awesome Oscillator (AO) shows declining bearish momentum, with green bars signaling that sellers are losing strength.
However, if MKR closes below the $1,000 support level, the bullish scenario may falter.
On-Chain Data Backs MKR’s Bullish Case
MKR’s Market Value to Realized Value (MVRV) ratio sits at -25%, reflecting an average 25% loss for MKR holders, suggesting a potential bottom on October 23. Revenue data from DefiLlama shows a 75% increase since August, a positive signal for MKR’s fundamentals.
Still, investors should monitor rising exchange reserves, which could increase selling pressure if more tokens move to exchanges, according to CryptoQuant.
Community to Decide on Rebrand
The MakerDAO community will soon vote on whether to keep the “Sky” brand, with a governance poll set for November 4. This rebranding decision follows a $25 million investment in branding the protocol’s governance token and products.
In sum, MakerDAO (MKR) is at a pivotal point, and with a successful breakout, it could experience significant upside in the weeks ahead.
