Maker (MKR), one of the leading decentralized finance (DeFi) tokens, is showing signs of a potential rally, backed by a combination of bullish technical indicators and on-chain data. The cryptocurrency, currently trading above $1,500, is nearing key resistance levels that could determine its next major move. A significant breakout could be on the horizon if current trends continue, suggesting that MKR might soon see a notable increase in value.

Key Indicators Suggest a Bullish Reversal

As of Thursday, Maker’s price hovers around $1,561, a level that has caught the attention of traders and analysts alike. The token is slowly climbing towards a critical descending trendline that has been limiting its upward movement since late July. This trendline, which also coincides with a significant resistance point at $1,669, presents a major hurdle for the token’s price.

However, what has many in the crypto space optimistic is the presence of a bullish divergence on the charts. A bullish divergence occurs when the price makes a lower low, but technical indicators, such as the Relative Strength Index (RSI), make a higher high. This pattern often indicates that bearish momentum is weakening and that a reversal to the upside may be imminent. In Maker’s case, the divergence between price action and the RSI is being closely watched by traders.

If MKR manages to break above this trendline and close above the key resistance level of $1,669, a rally of up to 30% is possible, with the next significant target around $2,175. This would mark a substantial gain for the token and could signal the beginning of a stronger bullish trend in the coming weeks.

On-Chain Metrics Back the Bullish Sentiment

It’s not just technical indicators that are pointing to a potential rally for Maker. On-chain data further reinforces the idea that MKR could be gearing up for an upward surge. One key metric, the Exchange Flow Balance, is currently showing a positive outlook for the token.

The Exchange Flow Balance tracks the net movement of MKR tokens between exchange wallets and other wallets. When more tokens are moved out of exchanges than are moved in, it typically signals reduced selling pressure, as investors tend to transfer assets into cold wallets for long-term holding. Conversely, an increase in the number of tokens entering exchanges usually indicates rising selling pressure.

For Maker, the Exchange Flow Balance showed a sharp drop from -191 MKR on September 16 to -42,770 MKR by September 17. This dramatic shift suggests that large amounts of MKR were removed from exchanges during this period, indicating that investors are holding onto their tokens rather than selling them. This decrease in selling pressure is a bullish sign, as it reflects growing confidence in the token’s future price performance.

Key Levels to Watch: What’s Next for Maker?

For MKR, the next few days will be critical as it approaches the $1,669 resistance level. If the token successfully breaks above this barrier and closes above it on the daily chart, it could lead to a significant price surge. The next target would be the $2,175 resistance level, where previous support and resistance levels converge, making it an important milestone for Maker’s potential rally.

However, the bullish scenario is not guaranteed. If MKR fails to break above the descending trendline and closes below the $1,431 mark, it would invalidate the bullish thesis and could lead to further declines. A close below this level could trigger a drop of around 12%, pushing the token down to retest its support level at $1,260.

Traders and investors should keep a close eye on these key levels in the coming days. The $1,669 resistance level will serve as a critical test for Maker’s ability to continue its upward trend. A successful breakout could trigger a new wave of buying, pushing the token into a more bullish phase.

Conclusion: Will Maker See a Strong Rally?

Maker’s price action, combined with bullish technical indicators and on-chain metrics, suggests that the token is primed for a potential rally. The bullish divergence on the charts and a positive shift in the Exchange Flow Balance highlight growing confidence among investors and point to reduced selling pressure. If Maker can break above the $1,669 resistance level, a 30% price surge to $2,175 could be on the horizon.

However, it’s important to watch for any downside risks. A daily close below $1,431 would invalidate the bullish outlook, potentially leading to further price drops. The coming days will be crucial in determining whether Maker can continue its upward trajectory or if a correction is imminent.