Crypto trader turns nearly $3M into less than $2M in 50 days 
Cryptocurrency Sep 15, 2024 Share
A cryptocurrency trader lost $1.13 million in 50 days, capitulating from his MakerDAO (MKR) position after the Sky announcement. MakerDAO is one of the most popular decentralized finance (DeFi) governance protocols created to support the multi-collateralized dollar stablecoin, DAI.
In a recent brief report, Lookonchain identified the potential capitulation by the Ethereum (ETH) address ‘0x3c7…‘ on September 14. The anonymous cryptocurrency trader deposited 1,100 MKR tokens into a Binance address at an exchange rate of $1,613.
If truly selling at the depositing price, the trader would have gotten $1.77 million in return. However, these 1,100 MKR were priced at $2,643 on July 27 when they landed at this monitored address.
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According to the report, the trader turned approximately $2.91 million into $1.77 million and lost $1.13 million.
0x3c7446ba4c16e0a8b37b005340f5f566d7ab33ab MKR transaction. Source: Etherscan / Finbold
MakerDAO (MKR) unusual rebranding to Sky
In late August 2024, the MakerDAO announced its rebranding to Sky Ecosystem (SKY) and DAI’s rebranding to USDS. However, instead of simply renaming the token, the organization launched SKY as a new token, partially airdropped to MKR holders.
SKY, the upgraded version of MKR.
As the native governance token of the decentralized Sky Ecosystem, SKY will be available for MKR holders to optionally upgrade at a rate of 1 MKR to 24,000 SKY through the Sky Protocol.
Learn what you can do with SKY ↓ pic.twitter.com/3k9BHToniV
— Sky (@SkyEcosystem) September 10, 2024
The market received the stunt skeptically, considering it would render MKR useless once the airdrop concludes, fueling fear and uncertainties. As things developed, launching a brand new token was perceived as a short-term fundraising strategy, diluting the ecosystem’s value.
Interestingly, the crypto trader, who lost $1.13 million in 50 days, purchased MKR before the rebranding, selling in response.
MKR price analysis
As fear lingers, the MKR token has crashed 18.58% in 30 days and is currently trading at 1,596. Essentially, cryptocurrency traders could have already started pricing its replacement and incoming uselessness after SKY’s announcement.
There is key support at the $1,500 psychological level, which MKR must keep to avoid further losses. Yet, this support may break if sentiment does not change and the selling spiral continues. MKR can find some demand from traders looking at the SKY airdrop.
Maker (MKR) monthly price chart. Source: Finbold
This crypto trader’s recent capitulation is a cautionary tale on how even solid cryptocurrencies can negatively surprise the market. Everything can change in a few weeks, risking affecting the value perception of an asset and forcing capitulation.
Notably, Finbold has been reporting and alerting on fundamental aspects that could influence price, such as token unlocks from Ethereum second-layers and competing L1s. Moreover, DeFi leveraged traders like the millionaire James Fickel have also shown a tendency to capitulate at the current state of the market.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.