Maker price poised for rally following Grayscale's launch of MakerDAO Trust
|- Grayscale, a leading crypto asset manager, launches Grayscale MakerDAO Trust for its investors.
- MKR's Exchange Flow Balance shows a negative spike, signaling a bullish price move.
- On-chain data shows that MKR's open interest is rising, indicating new buying activity, which suggests a bullish trend.
- Investors should be cautious about decreasing Development Activity.
Maker (MKR) saw a 6.3% price rally on Tuesday and remains up 0.3% at $2,147 on Wednesday. A negative spike in MKR's Exchange Flow Balance and rising open interest signal a bullish trend. At the same time, Grayscale's launch of the MakerDAO Trust further reinforces a positive outlook for the token in the near future.
Maker sees new buying activity amid decreasing supply on exchanges
Data from CoinGlass shows that the futures’ Open Interest (OI) in Maker at exchanges is increasing. The OI indicates the total number of outstanding derivative contracts that have not been settled (offset by delivery) and whether money flows into the contract are increasing or decreasing.
Increasing OI represents new or additional money entering the market and new buying, which suggests a bullish trend. When OI decreases, it is usually a sign that the market is liquidating, more investors are leaving, and the current price trend is ending.
The graph below shows that MKR's OI increased from $91.87 million on Monday to $123.86 million on Tuesday, indicating that new or additional money is entering the market and new buying is occurring.
MKR Open Interest chart
Santiment's Exchange Flow balance for MKR shows the net movement of tokens into and out of exchange wallets. A positive value indicates more MKR tokens entered than exited, suggesting selling pressure from investors. Conversely, a negative value indicates more MKR left the exchange than entered, indicating less selling pressure from investors.
In MKR's case, the Exchange Flow balance has slumped from 1,265 to -1,760 from Sunday to Tuesday. This negative spike indicates increased buying activity and decreasing selling pressure among investors.
During this event, the MKR Supply on Exchanges declined by 1.36% in two days. This is a bullish development, which further denotes investor confidence in Maker.
MKR Exchange Flow Balance and Supply on Exchange chart
Despite Grayscale's launch of MakerDAO trust, rising open interest and decreasing supply on exchanges, MakerDAO's development activity still needs to grow, suggesting that investors should not anticipate an immediate price rally for the token.
MKR Development Activity
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.