- Whale sold a huge majority of its holdings, causing MKR’s price to fall.
- The protocol struggled to generate TVL.
The price of MKR has had quite an impressive run over the last month. Since 26 June, the price of the MakerDAO[MKR] governance token has soared from $688.16 to $1138.12.
Will whales spoil the rally?
However, the price of the MKR token may begin to decline soon.
According to data provided by lookonchain, a whale investor sold off 1,598 units of MKR (equivalent to $1.8 million), causing the price of MKR to decline by approximately 2% at press time. Between 7 July and 17 July, this investor withdrew a substantial amount of 2,760 MKR (worth $2.5 million) from Binance, with an average withdrawal price of $918.
Considering the current market prices, the profit from these transactions stood at approximately $560,000 at the time of writing.
Another factor that could impact MKR could be the declining network growth. According to Santiment’s data, the network growth of MKR fell significantly over the last week. The decline in network growth implied that new addresses did not frequently exchange MKR in the last seven days.
During the same period, the velocity of the MKR token also fell, suggesting that a lack of activity wasn’t just limited to new users. However, the number of addresses carrying MKR remained relatively the same, as showcased by the token holder indicator.
This implied that the recent price decline was due to the activity of large whales as despite the massive sell-offs, the number of addresses holding MKR remained largely unchanged.
Only time will tell whether the faith in the governance token will continue to decline following the recent whale activity.
State of the protocol
In addition to the decline in interest in the MKR token, there was a lack of activity observed on the MakerDAO protocol as well. This was indicated by the TVL collected on the MakerDAO protocol which steadily fell by 18.6% over the last month. Despite the difficulties with TVL, the revenue generated by the protocol remained positive.
Is your portfolio green? Check out the MakerDAO Profit Calculator
According to Token Terminal’s data, the revenue generated by MakerDAO surged by 53.4% in the last month.
Source: Token Terminal
Additionally, according to calculations made by the Makerburn website, the protocol could foresee a profitable year ahead. If expenses and parameters remain stable, the website suggests that an estimated annual profit of 89.01 million DAI can be expected.
This article originally appeared here.
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