Since the token has been floating in a dead range for the past few months, SushiSwap‘s 21% jump in October certainly seemed unexpected to the bulk of investors.
On-chain data, however, indicated that a significant increase in volatility should have been anticipated. In a recent article, Santiment described how SushiSwap had an extraordinary uptick in network growth, with the creation of new addresses reaching an eight-month high. Along with an increase in the number of new addresses on the network, the old addresses have resumed their previous activity from July.
The increase in all fundamental variables was a clear indication that volatility was about to increase. Unfortunately, a small number of investors were drawn away by the dismal price performance.
SushiSwap represented a viable investment opportunity
Investors and speculators did not pay attention to the on-chain indicators because they did not think SushiSwap represented a viable investment opportunity given the open interest on multiple trading platforms.
It is safe to conclude that the most recent price increase was caused more by the general market recovery than by the network’s actual expansion. As of right now, SushiSwap needs to establish a foothold above the 50-day moving average in order to proceed upward to the following resistance level.
Investors are willing to support the rally’s continuation, at least as long as the market is somewhat stable, according to volume profiles. Bulls might not be able to close the distance between the resistance, especially as long as the DeFi industry is still struggling.
Consolidation or sluggish expansion toward the 200-day moving average is the most likely outcome from here. To get there, sushi would need to either see a 70% price spike or consolidate for at least two months.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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