The price of Maker (MKR) has dropped by 6% in the past 24 hours, currently trading near $1,035. This decline comes after the token surged to $1,285 on Coinbase last Friday following the activation of MakerDAO’s token buyback program. However, MKR’s price has been affected by daily deposits made by venture firm a16z to Coinbase, causing the price to decline.

According to data from CoinGecko, MKR price has shed its weekly gains to only 8%. Furthermore, the Total Value Locked (TVL) in MakerDAO has also decreased by 6% over the past week, reaching approximately $5.24 billion.

Reasons for the Decline in MKR Price

MKR’s price decline coincided with the activation of the token buyback scheme by MakerDAO. The buyback scheme, implemented through the Smart Burn Engine, resulted in a significant increase in the price of MKR. However, after venture giant a16z deposited a large amount of MKR to Coinbase, the price started to decline.

Spot On Chain, an on-chain analytics platform, reported that a16z deposited 9,223 MKR worth $9.73 million in the past week and 1,380 MKR worth about $1.54 million in the past 24 hours. Each of these daily deposits has been followed by a decline in the price of MKR. With a16z still holding 16,536 MKR, there is potential for further pressure on the token if more MKR is dumped.

As a result of the price drop, MKR is likely to see a fresh breakdown that could push it below $1,000. The key support levels in this scenario are expected to be at $984 and $865. On the other hand, if bulls can strengthen the price above $1,100, they can aim for the one-year highs reached on Friday.

FAQs

What is Maker (MKR)?

Maker (MKR) is the governance token of the MakerDAO protocol, which is a decentralized platform built on the Ethereum blockchain. It allows users to create and manage stablecoins, such as DAI, through collateralized debt positions (CDPs).

What is MakerDAO’s token buyback program?

MakerDAO’s token buyback program is an initiative designed to reduce the supply of MKR tokens in the market. Through this program, MakerDAO aims to remove $7 million worth of MKR over the next month, potentially increasing the scarcity and value of the token.

What is a16z?

a16z, also known as Andreessen Horowitz, is a prominent venture capital firm in the cryptocurrency and blockchain space. They have made significant investments in various projects and are known for their influence in the industry.

What is Total Value Locked (TVL)?

Total Value Locked (TVL) refers to the total amount of assets, typically in the form of cryptocurrencies, that are locked or held within a decentralized finance (DeFi) protocol. It is used as an indicator of the popularity and adoption of a particular DeFi platform.

Summary

The price of Maker (MKR) has dropped by 6% in the past 24 hours, trading near $1,035. This decline follows a surge in price after MakerDAO activated its token buyback program. However, daily deposits made by venture firm a16z to Coinbase have caused the price to decline. MKR’s price decline could lead to a potential breakdown below $1,000, with support levels at $984 and $865. On the upside, if the price strengthens above $1,100, it could target the one-year highs reached on Friday.