The decentralized finance (DeFi) landscape continues to evolve rapidly, with investor sentiment often swayed by technical indicators and market movements. Recently, a popular crypto analyst has drawn attention to a potential reversal signal in the price action of Maker (MKR), one of the foundational governance tokens in the DeFi ecosystem. According to technical analysis, MKR could be entering a phase of consolidation or even a short-term pullback.
Bearish Signal on MKR’s 12-Hour Chart
Ali Martinez, a well-followed crypto trader with over 128,000 followers on X (formerly Twitter), pointed to a bearish signal generated by the Tom DeMark (TD) Sequential indicator on MKR’s 12-hour chart. This technical tool is widely used by traders to anticipate trend reversals based on a sequence of 13 consecutive candlesticks.
When the TD Sequential reaches a count of 13 and aligns with specific price conditions, it often signals that an extended move may be nearing exhaustion. In this case, Martinez noted:
“Maker MKR could be gearing up for a pullback, as the TD Sequential indicator flashes a sell signal on the 12-hour chart!”
This observation comes at a time when MKR is trading around $1,441, reflecting a minor dip of nearly 1.5% in the past 24 hours. However, zooming out reveals a stronger performance: the asset has surged nearly 45% over the past seven days, suggesting that the current signal may indicate profit-taking rather than the start of a prolonged downtrend.
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Market Context: MKR’s Role in DeFi
Maker (MKR) is the governance token of the MakerDAO protocol, one of the earliest and most influential platforms in the DeFi space. It enables users to generate the stablecoin DAI by locking up collateral in smart contracts. As DeFi activity increases, demand for MKR can rise due to its role in protocol upgrades, risk management, and fee distribution.
Despite its fundamental strength, MKR remains highly sensitive to broader market sentiment and technical patterns—especially after sharp rallies. A 45% weekly gain puts it in overbought territory by many technical standards, making the TD Sequential warning particularly relevant.
Sonic (S): A New Narrative in Layer-1 Evolution
Martinez also turned his analytical lens toward Sonic (S), the newly rebranded token of what was previously known as Fantom. The layer-1 blockchain has undergone significant restructuring, aiming to enhance scalability and attract developer interest through a new modular architecture.
The analyst questioned whether Sonic had just completed a mini market cycle and might now be entering what he refers to as the “anxiety” phase—a period where early euphoria fades, volatility increases, and weaker hands exit.
“I wonder if Sonic has just completed a mini market cycle and is now entering the ‘anxiety’ phase.”
At press time, Sonic (S) trades at $0.854, showing little movement over the past day but up nearly 56% in the past week. This kind of rapid appreciation often precedes consolidation, especially when driven more by narrative than immediate fundamentals.
Whale Activity Signals Confidence in ETH and XRP
Beyond individual token analysis, Martinez highlighted significant accumulation activity by crypto whales—large investors capable of influencing market direction.
In the last 24 hours alone:
- Whales acquired 140,000 Ethereum (ETH).
- Over 20 million XRP were purchased by deep-pocketed investors.
These moves suggest strong institutional or high-net-worth interest despite short-term price fluctuations.
Ethereum Accumulation
Ethereum, currently trading at $2,679, remains a cornerstone of the crypto economy. Whale buying during periods of sideways or slightly negative price action often indicates long-term confidence in upcoming network developments, such as further upgrades to scalability and staking efficiency.
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XRP Sees Strong Institutional Interest
Meanwhile, XRP, trading at $2.53, has seen a more volatile week with a 5% drop in the past day. However, the whale accumulation paints a nuanced picture: while retail sentiment may be cooling, major players appear to be accumulating at current levels.
This divergence between retail and institutional behavior is common in mature crypto markets and often precedes reversals or renewed momentum.
Key Takeaways for Traders and Investors
While technical signals like the TD Sequential are not foolproof, they offer valuable context—especially when combined with on-chain data and macro trends.
For MKR, the bearish signal doesn’t negate its strong fundamentals but serves as a cautionary note for traders who entered late in the rally. A pullback could present a strategic entry point for those bullish on DeFi’s long-term trajectory.
For Sonic (S), the rebranding and recent price surge reflect renewed market interest. However, navigating the “anxiety phase” requires patience and risk management, as volatility is likely to persist.
And for ETH and XRP, whale accumulation underscores underlying demand even amid mixed price action—potentially signaling accumulation ahead of broader market moves.
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Frequently Asked Questions (FAQ)
What is the TD Sequential indicator?
The TD Sequential is a technical analysis tool developed by Tom DeMark to identify potential trend exhaustion points. It counts price bars and triggers signals when certain patterns form over 13 consecutive periods, often indicating an upcoming reversal.
Why is MKR considered important in DeFi?
MKR is the governance token for MakerDAO, one of the first decentralized lending platforms. It allows holders to vote on critical decisions like risk parameters, collateral types, and protocol upgrades—making it central to the DAI stablecoin ecosystem.
What does whale accumulation mean for a cryptocurrency?
Whale accumulation refers to large investors buying significant amounts of a token. Historically, sustained accumulation often precedes price increases, as it suggests confidence and reduced circulating supply.
Is a “pullback” the same as a crash?
No. A pullback is a short-term decline following an uptrend, typically seen as a healthy correction. It differs from a crash, which involves rapid, panic-driven selling across markets.
How reliable are social media-based trading signals?
While insights from experienced traders like Ali Martinez can be valuable, they should be part of a broader analysis strategy. Always verify signals with independent research and risk management protocols.
What factors influence layer-1 tokens like Sonic (S)?
Layer-1 tokens are influenced by network usage, developer activity, transaction fees, competition from other blockchains, upgrade roadmaps, and overall crypto market sentiment.
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