Maker [MKR], a prominent player in the decentralized finance (DeFi) space, has faced notable volatility over the past few weeks. After a sharp dip to a mid-February low, the token made a brief rally towards $1,700, only to retrace back to the $1,350 mark. As of now, MKR is testing support at $1,279, and there are key indicators that might determine whether this support holds or if a further downside is on the horizon.

Cost Basis Distribution – Investor Positioning

One of the key tools to understand MKR’s price behavior is the Cost Basis Distribution metric. This tool gives insight into how investors have positioned themselves at different price levels, revealing where significant buy and sell clusters have formed. The analysis indicates that a substantial portion of MKR’s investor base accumulated tokens when the price was between $1,300 and $1,500.

As the price approaches these levels again, the behavior of investors will play a crucial role in determining whether the support at $1,300 holds. If buyers are still engaged and willing to accumulate at these levels, MKR could experience upward movement. However, if this support fails, further downside could be expected.

Support and Resistance Levels

At the time of writing, MKR was trading at $1,279, with a 1.31% decline in the last 12 hours. A critical resistance level for MKR is around the 50-day moving average (MA), which stands at $1,331. A breakout above this level could shift momentum in favor of the bulls. However, the 200-day MA at $1,471 represents a significant long-term resistance level, where profit-taking could create selling pressure.

On the other hand, if MKR fails to maintain the current support levels, it could test the $1,200 region, which has acted as a strong support level in the past. This would mark a crucial point for potential buyers to step in and help prevent further downside.

Money Flow Index (MFI) and Potential Bounce

Another key indicator to monitor is the Money Flow Index (MFI), which currently stands at 29.04. This suggests that MKR is approaching oversold conditions, which could indicate that the altcoin is due for a potential bounce. If buying pressure increases, MKR could rebound towards the $1,350–$1,400 range, where the next major supply cluster lies.

However, if sellers continue to dominate the market, the price could drop further and test the $1,200 level, an important demand zone for MKR.

Investor Engagement and Market Sentiment

Recent investor behavior offers a mixed view. There’s evidence of long-term holders accumulating MKR at lower levels, while short-term traders have been rotating out of positions at resistance zones. This pattern indicates that the price trend could be influenced by the strength of accumulation in the $1,300–$1,500 range. If the accumulation continues and buying pressure increases, MKR could attempt a breakout towards the $1,600–$1,700 zone.

Conversely, if selling pressure persists and support fails to hold, a deeper correction could occur, potentially pushing MKR toward the $1,200 zone.

What’s Next for MKR?

MKR is at a crucial juncture in its price action, with cost basis distribution indicating key accumulation and distribution zones. The next move will depend on whether buyers can sustain demand in the $1,300–$1,500 range, or if a deeper correction is required to establish a new demand zone.

Traders and investors should closely monitor the MFI, moving averages, and cost basis clusters for potential signs of a trend shift. A breakout above $1,400–$1,500 could lead to a retest of $1,700. However, if weakness continues, MKR may experience further declines, with $1,200 acting as the next key support level. As market conditions evolve, MKR’s next major move will depend on how investors respond at these critical levels.