In mid-June to the entire month of July, the price of Maker (MKR) rose by 115%, reaching over $1,300. Subsequently, a market correction brought MKR down to $1,245. This adjustment was necessary and predictable as the surge had caused the market to become overheated, requiring a cooldown.
This is evident in the Relative Strength Index (RSI). Although the index has declined, it still remains in the bullish zone.
MKR/USD daily chart, Source: TradingView.
However, despite the relatively small retracement, it has triggered concerns and fears among investors, causing the project to seemingly lose its appeal. Network growth, which measures the rate of new address formation on-chain, has reached a two-month low, indicating waning interest from new users in Maker.
Maker network growth trend, Source: Santiment.
This not only slows down the recovery of the Maker price but also hampers the rebound in network strength, which is determined by the number of users and investors. By the end of June, the total number of addresses holding a partial balance of MKR decreased by more than 3,000, and since then, it has only slowly increased by 1,000, leaving a gap of 2,000.
Maker total addresses and balances, source: IntoTheBlock.
However, a swift recovery in the price of MKR could spark bullish sentiment among investors, attracting new participants. As long as MKR remains above the support level of $1,107, the likelihood of a significant decline is very low, and staying above $1,200 would keep the altcoin poised for a possible rebound, thereby fostering a bullish momentum.
