SushiSwap (SUSHI) could start a short-term rally towards $8.30 – $8.90, but the long-term bias still seems bearish.
Descending resistance line
SUSHI has been declining along with a descending resistance line since hitting an all-time high of $22.53 on May 18. The line has rejected the award four times, most recently on December 30.
An interesting move took place in early December when SUSHI fell below the $6.35 zone (red circle).
While this initially looked like a mistake, the token reclaimed the zone shortly after.
It is currently in the process of reconfirming this zone as support. Holding above it or breaking below it will likely determine the direction of the future trend.
Daily SUSHI/USDT chart | Source: TradingView
Short term movement
A closer look at the daily time frame shows that SUSHI will not regain the $6.50 region but will continue to drop to fresh lows.
The first indication of this possibility comes from the fact that the token has reached a close below this price zone and now appears to be validating it as resistance.
The second signal comes from technical indicators as both MACD and RSI are bearish. The former is in negative territory while the latter is below 50. Both are signs of a downtrend.
Daily SUSHI/USDT chart | Source: TradingView
Trader @George1Trader tweeted a SUSHI chart and said the token could go to $8.
The source: Twitter
Although the token has fallen since the tweet, it appears to have completed a five-wave pulse, measured from its Dec. 10 high. The next thing after such a drop is usually a rally.
In this case, the next resistance lies between $8.30 and $8.86. This is both a Fib resistance area and a horizontal resistance area.
However, the fact that the decline was a five-wave bearish impulse suggests that the trend is bearish. It is also consistent with signals from technical indicators and a breakout of the $6.50 zone.
Therefore, once the recovery is complete, another downtrend is likely to follow.
SUSHI/USDT 2 hour chart | Source: TradingView
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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