Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer
- MKR at the time of writing cracked below $1.40 as the retracement extended.
- There were high liquidation levels at $1350 and $1450, which could trigger a strong price reaction.
Maker [MKR] fluctuated between $1488 and $1350 in the first half of October, allowing traders to take advantage of extreme levels. At the price point, sellers took a short position after MKR faltered at the overhead resistance at $1488.
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Short sellers made short profits of +5.6% after MKR fell below $1405 at the time of writing. The price of a previous MKR analysis correctly predicted a recovery to $1350. After a hiccup at $1,488, will the pullback extend to the short-term support?
Will Maker Sellers Expand Their Shorting Profits?
Source: MKR/USDT on TradingView
The $1405 has been a key price reaction level since late September. A crack underneath, as seen at the time of writing, could encourage sellers to expand their profits.
Furthermore, the short-term price trend of MKR turned negative as evidenced by the price action below the 50-exponential moving average (EMA). Other key price indicators were also negative, as the declining Relative Strength Index (RSI) and Chaikin Money Flow (CMF) showed. It underlined a bearish scenario amid a spike in selling pressure and capital outflows.
So, sellers could drag the MKR into the short-term demand and bullish order block (OB) in the fourth half of the fourth month at $1350 (white). A longer decline from support will yield an additional 3.8%, meaning a short profit of $1405.
The key liquidation levels were $1350 and $1450
Source: Hyblock Capital (heatmap at liquidation level)
Liquidation data from Hyblock Capital pointed to $1350 and $1450 as the immediate high liquidation levels (orange). In conclusion, high liquidation zones act as support or resistance zones and can also trigger strong price reactions.
How many Worth 1,10,100 MKRs today?
Ergo, the $1350 was a demand zone and crucially high liquidation levels. Thus, MKR prices could be dragged towards the bearish target of $1350 due to the rush for liquidity.
However, traders should monitor BTC’s price action for optimized trading setups.