Maker (MKR) Signals Bullish Price Formation – Is $1.300 Around The Corner?
July 30 2023 - 8:22AM
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Maker (MKR), one of the prominent players in the decentralized
finance (DeFi) space, has experienced a remarkable 11% price surge
in the past seven days. Despite a slight drop in the last hour, the
token’s performance remains impressive. Maker (MKR) Bullish
Price Sentiment Maker’s recent price performance has been
noteworthy, with a solid 11% increase over the past week. The token
also recorded a 4.21% price increase in the last 24 hours,
indicating strong momentum in the short term. However, a minor
correction of 0.81% in the past hour highlights the market’s
volatility. Currently trading at $1,220.43 per MKR, the token
remains 80.75% below its all-time high of $6,339.02. While the
recent price surge is encouraging, it is essential to consider the
historical context and the factors influencing the crypto market’s
dynamics. The MakerDAO community recently voted in favor of a
temporary increase to the interest rate paid to holders of the
protocol’s decentralized stablecoin, DAI. This proposal introduced
the Enhanced Dai Savings Rate (EDSR), a mechanism to temporarily
boost the Dai Savings Rate (DSR) to users during periods of low
utilization. Proposed by Maker founder Rune Christensen, the EDSR
could increase the effective DSR to 8% when the utilization ranges
from 0% to 20%. The mechanism is designed to decrease the DSR as
utilization increases gradually. Related Reading: Shiba Inu
Reclaims 14th Spot In Market After 5% Jump This isn’t the first
time Maker has adjusted the DSR. In the past few months, the
protocol has raised the DSR thrice: first to 1% in November, then
to 3.3% in May, and finally incorporating a marginal increase to
3.49% in June. The latest EDSR proposal aims to incentivize DAI
holders and stimulate demand for the stablecoin. Stimulating Demand
For DAI Despite the recent increase in the DSR, data from Dai Stats
shows that investors have only deposited $307 million in the DSR,
representing a modest 6.7% of the total supply of DAI. The amount
of DAI in circulation decreased to $4.6 billion from over $6.9
billion in the previous year. In response to the declining
circulation of Maker’s dollar-pegged stablecoin, the protocol is
taking proactive steps to spur demand for DAI. By enhancing the
interest rate DAI holders can earn, the protocol aims to attract
more users and create a favorable ecosystem for DAI utilization.
Related Reading: Tether (USDT) Market Cap Reaches New Peak, Edges
Toward $84 Billion Mark The broader stablecoin market has also
experienced a downtrend, with the total market capitalization
sinking to $127 billion from nearly $160 billion a year ago. The
introduction of EDSR is seen as a strategic move to increase the
appeal of DAI and strengthen its position in the competitive
stablecoin landscape. What’s Next For Maker (MKR)? As Maker
continues improving the DAI ecosystem, investors closely monitor
its governance decisions and the market’s response to the enhanced
interest rate mechanism. The success of the EDSR proposal could
drive further adoption of DAI and contribute to its overall
liquidity in the market. Moreover, the broader crypto market’s
performance and regulatory developments will determine Maker’s
future trajectory. If the bullish sentiments continue, Maker could
surpass the $1,300 resistance point but if the opposite occurs the
next support levels are $1,200 and $1,180. (This site’s
content should not be construed as investment advice. Investing
involves risk. When you invest, your capital is subject to risk).
Featured image from iStock, chart from TradingView
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