SushiSwap: Estimating the viability of a trend reversal based on these metrics

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  • SushiSwap’s mar­ket indi­ca­tors sug­gest­ed a poten­tial trend reversal. 
  • How­ev­er, SUSHI’s on-chain met­rics remained bullish. 

On 24 Jan­u­ary, DeFiLla­ma revealed that the trad­ing vol­ume of SushiSwap [SUSHI] on Arbi­trum was steadi­ly increas­ing. As per the tweet, on 23 Jan­u­ary, 44.6% of the total SushiSwap trad­ing vol­ume occurred on Arbitrum. 

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Apart from trad­ing vol­ume, SUSHI’s price also increased over the last week. SUSHI reg­is­tered over 6% week­ly gains, and at the time of writ­ing, it was trad­ing at $1.36 with a mar­ket cap­i­tal­iza­tion of more than $303 million. 

While these updates looked opti­mistic, the mar­ket indi­ca­tors told a dif­fer­ent story. 

Cold days for SushiSwap again?

A look at SUSHI’s dai­ly chart revealed that there was a pos­si­bil­i­ty of a trend rever­sal soon, as a few of them were bear­ish. The Mon­ey Flow Index (MFI), after reg­is­ter­ing a decline, took a side­ways path. SUSHI’s Chaikin Mon­ey Flow (CMF) went in the same direc­tion as MFI. 

More­over, the Rel­a­tive Strength Index (RSI) entered the over­bought zone, which fur­ther increased the chances of a price decline in the days to fol­low. Nonethe­less, the Expo­nen­tial Mov­ing Aver­age (EMA) Rib­bon gave hope for a con­tin­ued uptrend. 

Source: Trad­ingView

Real­is­tic or not, here’s SUSHI mar­ket cap in BTC’s terms

This is what metrics suggest

Sur­pris­ing­ly, the on-chain met­rics sup­port­ed the bull­ish sen­ti­ment, as they were in SUSHI’s favor. Net deposits on exchanges were low com­pared to the sev­en-day aver­age, which was a good sig­nal as it indi­cat­ed low­er sell­ing pressure. 

Santiment’s chart revealed that SUSHI was in demand in the deriv­a­tives mar­ket, as its DyDx fund­ing rate was up. SUSHI’s MVRV ratio also increased sub­stan­tial­ly, which looked bull­ish. Fur­ther­more, SushiSwap’s devel­op­ment activ­i­ty has increased in the last sev­en days, reflect­ing the devel­op­ers’ increased efforts to improve the network.

Source: San­ti­ment

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