- Maker price has risen in the past five straight days.
- There are risks about Dai and other algorithmic stablecoins.
Maker price staged a comeback on Tuesday as DeFi tokens and other cryptocurrencies rebounded. The MKR token rose to a high of $763, which was the highest level since September 12. It has risen by more than 30% from its lowest level this year, giving it a market cap of over $688 million.
Is Dai at risk?
Maker is one of the best-known players in the decentralized finance (DeFi) industry. It is the biggest DeFi platform in terms of total assets locked in its ecosystem. According to DeFi Llama, it has a TVL of over $7.5 billion, which is lower than its all-time high of over $19.2 billion.
Maker is known for its algorithmic stablecoin known as Dai, which is now accepted by more than 400 apps like Coinbase, Swissborg, and Bitcointrade. Dai is an algorithmic digital currency that aims to trade at $1. Unlike USD Coin and Tether, Dai is not backed by fiat currencies. Dai is the 13th biggest cryptocurrency in the world with a total market cap of more than $6.5 billion.
Therefore, Maker price dropped sharply recently amid concerns about a new bill in the United States. Following the collapse of Terra USD, regulators in the United States and other countries have been focusing on algorithmic stablecoins.
A bill in American congress has suggested banning algorithmic stablecoins for at least two years. If this happens, it would have a major impact on Dai and Maker in general. Still, in a divided congress, it is unlikely that the bill will pass, which explains why MKR price has risen.
Maker price is also in a recovery mode as other cryptocurrencies recover. For example, Bitcoin moved above $20,000 while the total market cap of all cryptocurrencies has jumped to over $925 billion. Other DeFi tokens like dYdX, Uniswap, and PancakeSwap have also surged.
Maker price prediction
The daily chart shows that MKR price has been in an overall downward trend in the past few months as concerns about the sector continued. It has made a strong comeback in the past few days and is now slightly above the 25-day and 50-day moving averages.
Maker’s MACD has also moved slightly below the neutral line. It also moved above the important resistance level at $657, which was the lowest level on June 18. Therefore, there is a likelihood that Maker will continue rising as buyers target the next key resistance level at $1,000.
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