- Following the announcements to make Silicon Valley Bank (SVB) depositors whole, MKR’s price rallied by double digits.
- Due to DAI depeg, MakerDAO’s fee income slipped by 10% over the weekend.
In response to recent developments, Maker’s [MKR] price experienced a substantial increase of nearly 30% in the last 24 hours.
This surge followed the announcement by Federal regulators to fully restore all deposits at failed Silicon Valley Bank (SVB). Additionally, fintech company Circle made a statement to cover any of its stablecoin USDC reserves, which further bolstered market confidence.
Circle’s USDC operations will open for business on Monday morning, including with new automated settlement via our new partnership with Cross River Bank. https://t.co/ybkSEedzrC
— Jeremy Allaire (@jerallaire) March 13, 2023
MKR’s price had seen only double-digit declines for most of the weekend prior to these announcements.
Further, these announcements have also helped drive up the values of de-pegged stablecoins DAI and USDC. At press time, both coins traded at $0.99 and aimed at reclaiming their $1 peg before the end of trading today, per data from CoinMarketCap.
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MKR holders have a cause to smile
At press time, MKR exchanged hands at $915.60. With improved sentiment in the last 24 hours, MKR’s Open Interests shot up significantly, per data from Coinglass. At $64.87 million at press time, MKR’s Open Interests rallied by 24% in the last 24 hours.
A jump in a crypto asset’s Open Interest is a significantly bullish signal, indicating that the number of outstanding contracts or positions for that asset has increased. It also reflects increased trading activity and improved market sentiment for a particular crypto asset.
Source: Coinglass
In addition, an assessment of MKR’s on-chain performance revealed a dip in its Network Profit/Loss ratio immediately before the price rally.
Typically, NPL dips often signal short-term capitulation of ‘weak hands’ and the re-entry of ‘smart money,’ according to Santiment. This is why “they tend to coincide with local bounce backs and periods of price recovery.”
Source: Santiment
Moreso, improved sentiment led to a spike in MKR’s Age Consumed after the announcements were made. This spike earmarked a local bottom and corresponded with a sharp uptick in MKR’s value.
An increase in an asset’s Age Consumed metric indicates a significant transfer of inactive tokens to new addresses, indicating a sudden and significant change in the behavior of long-term holders.
Long-term holders are typically patient and cautious, so any sudden movement of idle coins may be associated with significant changes in market conditions.
Source: Santiment
Read Maker [MKR] Price Prediction 2023-24
Maker still has to deal with the revenue decline
Due to DAI’s de-peg and drop in value in the past few days, MakerDAO suffered a decline in its fee income (annualized), data from Maker Burn revealed.
This stood at 43.21 million DAI at press time, having fallen by 10% over the weekend. This is expected to embark on an uptrend once DAI reclaims its $1 peg.
Source: Maker Burn
