SushiSwap doubles in value in two days - is it time for a pullback?



Title: SushiSwap: Analyzing the Recent Price Action and On-Chain Metrics

Introduction:
SushiSwap (SUSHI) has recently experienced a significant increase in trading volume, with the price surging by over 70% and the trade volume rising by more than 500%. While this may indicate a strong bullish sentiment, on-chain metrics suggest that the market might not be as healthy as it appears. In this blog post, we will delve into the price action and on-chain data to gain insights into the current state of SushiSwap.

A Potential Pump and Dump Scenario:
Concerns have arisen that SUSHI’s recent price surge might be a result of a pump designed to attract speculators before larger holders dump their holdings. While only time will reveal the true nature of this situation, it is crucial to monitor the $1 support level in the coming days.

Analyzing the Market Structure:
Typically, a liquidity hunt leads to a quick retracement of most of the price movement. However, in SUSHI’s case, the recent gains have not receded significantly, reaching a high of $1.3. A drop below the $1 and $0.8 levels could indicate the end of the rally for bullish investors. Alternatively, if the $1 mark is established as a firm support level, there may be further gains in the coming weeks. Fibonacci levels suggest that SUSHI could reach as high as $1.74 while still maintaining a higher timeframe bearish bias, underscoring the bear market’s strength over the past two years.

On-Chain Metrics and Their Implications:
Examining the on-chain metrics of SUSHI, we observe a significant downward spike in the exchange flow balance, indicating a withdrawal of SUSHI from exchanges. This suggests that long-term holders have been increasing their holdings. However, the mean coin age has been decreasing over the past six weeks, implying that SUSHI tokens are being exchanged between addresses, making them more likely to be sold. Additionally, the sharp increase in the MVRV (Market Value-to-Realized Value) ratio indicates a potential upcoming pullback as holders may seek to book profits.

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Conclusion:
Although the price action of SushiSwap has been encouraging for long-term bulls, it is important to consider the on-chain metrics that indicate potential sell-offs and profit-taking. The decline in the mean coin age signals that sellers are still active in the market. As a cryptocurrency investor, it is recommended to closely monitor the developments in SushiSwap and remain cautious in the face of potential volatility.

Remember to check the SUSHI Profit Calculator to assess the performance of your portfolio.



### News source: ambcrypto.com

By Team