Maker (MKR) has been rising since Jan. 22 and is now trying to break above long-term resistance.
Since reaching an all-time high of $6,348 on May 3, 2021, Maker has been on the decline. The initial decline was significant, down 71 percent in just 20 days. This decline led to a local low of $1,829 on May 23.
After the bottom, MKR bounced and consolidated for 238 days. On January 22, it appeared to have broken below the May 23 low (red line). However, it recovered this line shortly afterwards, making the previous breakout just a deviation.
This deviation is usually considered as a bullish development and usually leads to a sustained movement in the other direction.
Current Trading Model
Technical indicators in the daily time frame are bullish. This is especially evident by the fact that the RSI has risen above 50 (green icon). The RSI is a momentum indicator and readings above 50 are considered bullish.
In addition to this, the MACD is also moving upwards, although it is not yet positive.
Since the aforementioned all-time high in 2021, MKR has been below the downside resistance line. Currently, MKR is making its third breakout attempt. If successful, the next closest resistance area will be at $4,000. This is the 0.5 Fib retracement resistance level and horizontal resistance area.
MKR wave count analysis
Cryptocurrency trader @ewfib tweeted an MKR K-line chart, saying it looks like it may have completed its correction and will continue to move upward.
The most likely wave count suggests that MKR has completed five waves of upward movement and corrections since September 2020.
In the correction, the ratio of waves W to Y is 1:0.618, which is the second most common ratio in this type of structure, after 1:1.
If the structure is correct, it means that MKR has started a new uptrend that could take it to new all-time highs or even higher.
A break below the Y-wave low of $1,616 (red line) would invalidate this structure.
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