User Engagement Drops: Can Maker Price Crash Below $1400 Level?

i gårUser Engagement Drops: Can Maker Price Crash Below $1400 Level?
The 24 hour as well as 7 day active address has dropped to a three-month low.
Along with a 10% drop a week, Maker's price was listed among the top five losers of the week.

While the broader market was headed for a recovery, Maker seemed to be digging the ground more and more losing 10% a week. MKR price was on a 5 day losing streak and following a strong bearish path.

At the time of writing, Maker was exchanging hands close to $1444 losing over 3.5% a day. Along with this fall, Maker has erased all the gains of 2024 and was headed to erase more.

The long term as well as short term perspective is weak for Maker with a potential crash below the $1400 level if the selling pressure resumes. Recent on-chain data suggests the short term outlook may remain in the favor of sellers.
Investors Concern Over Decreasing User Engagement
Maker Price might emerge as one of the top underperforming cryptocurrencies this month due to a strong selling pressure that has dragged MKR below its annual lows. The price-performance states a decline of 25% a month and over 42% in a quarter.

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As per the Santiment, an on-chain analytics provider, the active addresses have dropped to three-month lows indicating a fading participation of the investors. The active address refers to the number of unique users taking part in a transaction within a given timeframe.

As per the data, the 24 hour as well as 7 day active addresses have decreased indicating a decreasing user engagement. The open interest curve was on a decline indicating the derivatives traders opting to stay out of the market.

Following the development, Maker price which was at $1500 yesterday now has fallen to $1440. This price drop affected the Market value to realized value (MVRV) ratio which is an on-chain metric used to calculate the level of unrealized profits or losses.

<iframe title="Santiment Chart: MVRV Ratio (7d) (MKR), MVRV Ratio (30d) (MKR)" width="800" height="425" src="embed.santiment.net/chart?ps=maker&pt=MKR&df=2024-06-17T18:30:01.070Z&dt=2024-09-18T18:29:59.070Z&emcg=1&emhwm=1&wm=mvrv_usd_7d;mvrv_usd_30d&wax=0;1&wc=#FF5B5B;#FFCB47&ws=;" scrolling="no"></iframe>

Within a day, the MVRV ratio has dropped from -12.1% to -15.8%. The decreasing MVRV ratio suggests the widening losses of the traders and investors.

Despite the selling pressure, the transaction volume has increased by 46.6% a day to $51.2 Million. Also, the volume to market cap ratio was 4.09% suggesting low volatility in the crypto.
Maker Price Forecast: Barish Pressure Mounts
From a price action point of view, Maker has been forming lower high pattern over the daily chart indicating a prevailing bearish trend. The bulls seem to be struggling for gains in the recent sessions.

Currently, Maker price is expected to resume melting towards the demand. On the lower side, the $1400 may act as a strong psychological support from where a bounce is likely. On the higher side, the 20 day EMA may act as a strong hurdle for the bulls to surpass.

For a trend reversal, the bulls need to accumulate prices near the demand followed by a strong breakout. However, it required enough buying volumes to counter the selling ones and exceed them.

Additionally, the MACD and signal line were placed below the zero line indicating a bearish pressure. Also, a diverging bearish crossover was observed between both the lines indicating more worse scenario ahead.