Maker investors must consider these MKR movements before placing long bets

ambcrypto.com:

Maker DAO’s MKR token has been on a recovery rally for almost three weeks but the bulls were showing signs of a slowdown. But should investors be preparing for a short sell opportunity or will MKR proceed with the current trajectory?

MKR’s $882 of 9 October represented a 43% upside from its lowest price of $581 which it achieved in September. This upside represented a healthy recovery rally considering its bearish performance since August. But does this mean that more upside was on the way?

To find the answers we must consider that MKR has been trading within a long-term trend channel since November 2021. Its latest upside pushed the token into the overbought zone but despite this, it still ha some room before interacting with its resistance line.

Source: TradingView

However, if the bulls manage to regain control for the next few days, then we can expect MKR to push closer to its resistance line. A resistance retest this week would likely put it back above the $1,000 price level. MKR’s Moving Average Convergence Divergence (MACD) indicator revealed that bullish volumes were levelling out in the overbought zone.

Here’s AMBCrypto’s price prediction for MKR for 2022

Now that MKR was overbought, investors should watch out for an increase in trading activity. Note that daily active addresses also dropped close to four-week lows in the last two days, confirming a decrease in buying volumes.

Source: Santiment

An increase in active addresses in the next few days may signify an influx of sell pressure. This does not necessarily have to be the case because bullish volumes can potentially trigger another upside. It was thus, important to confirm whether it was sell pressure or buying pressure.

Weighted sentiment can also be an ideal option