18 JAN 2022 (TUE)- Maker (MKR) Report Card

By quantdoge | Daily Crypto Risk Report | 18 Jan 2022


Investment Disclaimer:

  • I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
  • Past performance presented here is not an indicator of future performance.
  • This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post.

This crypto analytics article is written as a follow-up from 15 DEC 2021 (WED)- Maker (MKR) Report Card last month.

1. What is Maker Protocol ?

Maker Protocol is a Multi-Collateral Dai (MCD) system which allows users to borrow Dai (a stable coin backed by different collaterals posted onto the Maker protocol). Dai is widely accepted by many DeFi platforms and Centralized Exchanges (CEX) where it could be used to trade, lend, borrow and stake. Maker token (MKR) is used as a governance token for Maker Protocol where members (i.e. token holders) of Maker DAO could vote on various matters that are related to Maker Protocol. 

(Read more on https://makerdao.com/en/whitepaper#abstract )

2. How Maker Performs Relative to Other Cryptos ?

Performance of All Cryptos Under Quantdoge Watchlist since 2021 (Sorted by % Return)

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MKR has undergone 284.07% return from USD 587.2288 to USD 2,255.3716 since 01 Jan 2021. MKR is the 21th best performing crypto assets among others here.

3. How Resilience Maker Is Towards Bitcoin Crash Relative to Other Cryptos ?

Historically, all altcoins are somewhat dependent on Bitcoin price movement and it’s often the case where if Bitcoin falls, most altcoins would follow.

Top 3 Cryptos That Are Most Resilient To Bitcoin Crash During Each of BTC 4 Largest Crashes in 2021

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MKR has proven resilience against BTC crash in 1 out of the 4 instances.

During the last 4 BTC market crashes,
When BTC dropped by -13.47 %, MKR returned -24.24 % at 20 May 2021,
When BTC dropped by -13.13 %, MKR returned -17.96 % at 22 January 2021,
When BTC dropped by -12.16 %, MKR returned -5.02 % at 13 May 2021,
When BTC dropped by -11.39 %, MKR returned -22.08 % at 22 June 2021

4. Technical Analysis on Maker

4.1. Volume Weighted Average Price (VWAP)

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VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when MKR is closed at the end of every single day. 

Whenever blue line (close price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of MKR (blue line) to fall to its average level (orange line).

Whenever blue line (close price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of MKR (blue line) to rise to its average level (orange line).

As of 17 Jan 2022, VWAP is suggesting that MKR has been losing momentum and is now trading way below its month-long volume-weighted average price.

4.2. Moving Average Convergence Divergence (MACD)

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MACD is often used by trader as a momentum indicator. There are 2 lines that form the above charts, namely MACD (12, 26) lines and Signal(9) line, while the histogram is calculated by subtracting Signal (9) from MACD (12,26). Histogram would fall to the negative territory whenever MACD (12, 26) is trending at a lower level than Signal (9) and rise to the positive territory whenever MACD (12,26) is trending at a higher level than Signal (9).

MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of MKR closing price from its 12-day EMA. 
Signal (9) on the other hand is calculated as the 9-day EMA of MACD (12,26). 

As MACD (12, 26) goes higher away from Signal (9), it signifies that MKR is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that MKR is losing momentum. 

As of 17 Jan 2022, MACD is suggesting that although MKR is losing momentum.

4.3. Bollinger Band

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Bollinger band is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. Its chart made up of 4 lines, namely:

- SMA (20) (blue line), which is the 20-day simple moving average price of MKR
- Upper Band (orange line), which is computed by adding 2 standard deviations of MKR on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of MKR from SMA (20)
- Close (green line), which is the daily closing price of MKR

Whenever close line (green) touches the lower band (red), it indicates that MKR is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that MKR is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 17 Jan 2022, Bollinger Band is suggesting that MKR is being oversold and is now trading below its SMA line, and just slightly above the lower band , which often being treated as MKR support zone.  

4.4. Relative Strength Index (RSI)

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Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that MKR is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that MKR is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 17 Jan 2022, RSI is suggesting that MKR is slightly being oversold across all moving average windows.

Based on the technical analysis presented above, quantdoge is neutral on the near-term price action of MKR, but I could be wrong, hence please make your careful due diligence before making any financial decision.

5. Maker Risk Profile

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The probability distribution chart of MKR has shifted left, with lower probability of stabilizing near 0% daily return range, but with a higher probability of losing more than 10% daily, indicating that MKR trade is becoming riskier than before.

However, I could be wrong, hence please make your careful due diligence before making any financial decision.

6. Price Simulation for Maker

How did quantdoge simulation perform vs the actual MKR price movement over the last week ?

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Over the last 7 days, MKR is trading near the median range of all quantdoge simulations, indicating that MKR is neither being oversold to an undervalued position nor being overbought to an overvalued level.

7. MKR Community Analytics

Number of MKR Followers In The Past 24 Months


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During the past 2 years, Maker followers have grown 435.9 % from 36,390.0 to 195,015.0 on Twitter and grown 222.63 % from 10,111 to 32,621 on Reddit.

Number of MKR Followers In The Last 30 Days

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In the last 30 days alone, Maker followers have grown 1.17 % from 192,764 to 195,015 on Twitter and grown 1.05 % from 32,281 to 32,621 on Reddit.

Daily increment of Maker Twitter followers peaked on 21 Dec 2021 and its daily increment of Reddit followers peaked on 27 Dec 2021.

There are on average 88 new followers daily on Maker Twitter and 12 new subscribers daily on its Reddit.

Google Trends Analytics

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Maker DAO reached its peak in Google Search on 2021-05-09 with a Google Score of 100
Over the last quarter, Maker DAO Google Score has decreased 48.47 % from 57.25 to 29.5
Over the last 6 months, Maker DAO Google Score has decreased 18.96 % from 36.4 to 29.5

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Over the last month, Maker DAO is most sought after on Google search engine from Romania, Switzerland and New Zealand. 

Switzerland and New Zealand are classified by World Bank as high-income nations, hence, a high interest from these 2 geographical regions are bullish to MKR as their citizens are likely to have higher risk appetite and more spare cash to venture into the crypto space.

If you like my analysis and articles, please follow me at @quantdoge for daily updates.

Follow My Twitter for daily updates: https://twitter.com/quantdoge 

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quantdoge
quantdoge

Data scientist in crypto and blockchain space.


Daily Crypto Risk Report
Daily Crypto Risk Report

This blog was created by quantdoge, a data scientist in the cryptocurrency and blockchain space to publish daily risk reports on different cryptocurrencies. All published reports in this blog were analyzed with in-house algorithmic trading and quantitative risk management technology. ** Investment disclaimer: ** I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.

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