- DAI has reached a new low.
- MKR’s price rose, but remained vulnerable to a possible decline.
Total supply of MakerDAO’s [MKR] Data from reveals that the decentralized stablecoin DAI has reached a new low. MakerBurn.
At the time of publication, DAI’s supply stood at 4,42 million DAI. This is its lowest level since August 2023.
This is despite a double-digit increase in the value of the total locked (TVL) since the beginning March within the ecosystem for decentralized finance.
According to DefiLlama’s In the last eight days, TVL for the DeFi sector has risen from $87 billion up to $99 billion.
The Collateralized Debt Position Model (CDP) of the protocol is often cited as the reason for the decline in DAI’s Supply. This model is intended to maintain DAI’s value against the U.S. currency.
The interest rate on borrowing DAI from MakerDAO increases when the value of the assets that support DAI decreases.
This high rate of interest discourages potential borrowers from applying for loans and forces existing borrowers who have already borrowed to pay their debts promptly to avoid higher interest rates.
DAI is known to suffer a decrease in its overall supply as a result.
In the past week, DAI has seen a significant rise in its value, as well as the other crypto assets it uses to back the DAI. Ethereum [ETH], Wrapped Bitcoin [WBTC], Basic Attention Token [BAT]. Compound [COMP].
The recent drop in DAI supply could be attributed to a general decrease in interest for stablecoins on MakerDao.
MKR excels, but…
MKR value has increased despite the decrease in DAI supply.
According to data from CoinMarketCap.
A one-day chart of the token price revealed that there was a possibility of a temporary drawback.
MKR is climbing to a new two-year-high, but its Awesome Oscillator indicator (AO) has shown a majority of red bars facing upwards in the past week. This indicator measures market movement.
How much is 1,10,100 MKRs worth today?
If it returns with red bars pointing upwards, this could be a potential bearish indicator.
If there is a divergence, the asset’s momentum can be measured using its AO. This could indicate that an uptrend might not be sustained and a trend change may be coming soon.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
Source: ambcrypto.com