Maker (MKR) has enjoyed a sharp 23% rally today, but if the data of this on-chain metric is anything to go by, this rise may not last too long.

Maker MVRV Ratio Has Registered A Surge In Recent Days

The past month has been great for Maker investors, as the asset’s value has gained a whopping 86% during this period. MKR hasn’t slowed down recently, either, as the coin has only continued to show sharp bullish momentum.

As it currently stands, Maker’s profits in the past week mean that it is the best-performing coin among at least the top 100 assets in the cryptocurrency space. This constant rise that the asset has seen recently, however, may be coming to an end.

According to an analyst on Twitter, the MKR investors are currently holding onto a large amount of profits, which may entice them to sell their coins in order to harvest the gains.

The relevant on-chain metric here is the “Market Value to Realized Value (MVRV) ratio,” which measures the ratio between the market cap and realized cap of MKR.

The former of these is naturally the usual total valuation of the asset, while the former is a special capitalization model that’s based on the idea that the “real” value of any token in circulation isn’t the same as the current spot price, but rather the price at which the token was last transferred on the blockchain.

Since the realized cap accounts for the price at which each investor bought their coins, it essentially represents the total amount that investors have put into the asset.

If the market cap is higher than this model (that is, the MVRV ratio is greater than 1), it means that Maker’s value is more than what the holders as a whole put in, and thus, the average investor can be assumed to be holding some amount of profit right now. Similarly, in the opposite case, the holders would be at a deficit.

Now, here is a chart that shows the trend in the 365-day Maker MVRV ratio over the past few months:

The MVRV ratio being used here is the “365-day” version, meaning that it only takes into account the supply that showed some sort of movement within the last year.

From the chart, it’s visible that the 365-day Maker MVRV ratio has sharply gone up as the price has rallied. The current value of the indicator is 59%, which means that the investors who bought within the past year as a whole are holding around 59% in profits at the moment.

Historically, the higher the ratio’s value has gone, the more likely it is for a correction to take place. This is naturally because of the fact that investors buckle at some point and take in the profits they have amassed, thus leading to the price surge halting.

Therefore, the current high values of the metric may imply that Maker could see a cooldown very soon, which would result in at least a temporary setback for the rally.

At the time of writing, MKR is trading near the $1,300 level, up 23% in the past week.