Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- SUSHI showed encouraging price action for long-term bulls, moving the weekly chart bullishly with a move past $0.8.
- Findings from on-chain metrics suggested that the market might not be as healthily bullish as the price action showed.
SushiSwap [SUSHI] saw a big jump in trading volume in the past few hours. The price increased by just over 70% and trading volume by over 500%. While it pointed to intense sentiment, it could also be the frantic scrambling of an altcoin that arrived too late to the bull party.
Read SushiSwap’s [SUSHI] Price forecast 2023-24
This raised concerns that SUSHI had started a pump to attract speculators before the bigger holders dumped their assets. Was this the case? Time will tell, but as things stand now, the $1 support level could be crucial in the coming days.
The shift in the HTF market structure revealed that a false break could be unlikely
Source: SUSHI/USDT on TradingView
While it wasn’t guaranteed that this would always be the case, a liquidity hunt can usually figure out the bulk of the movement quite quickly. Therefore, gains over the past few days should have returned to the local highs of $0.816 (orange) or to the psychological resistance of $1.
They didn’t and instead managed to reach a high of $1.3. In the coming days, a decline below the $1 and $0.8 levels could be a warning to bulls that the rally was over. However, if the $1 mark were to turn around in support, further gains could be made in the coming weeks.
The Fibonacci levels showed that SUSHI could rise to $1.74 and still maintain a bearish bias on a higher time frame. This underlined the strength of the bear market of the past two years.
The on-chain metrics conveyed information that bulls could find discouraging
Source: Santiment
The exchange flow balance experienced a large downward spike, indicating SUSHI’s withdrawal from the exchanges. On November 1, 2.96 million SUSHI left and suggested long-term holders expand their holdings. Yet the average coin age has fallen over the past six weeks.
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This meant that SUSHI saw steady token movement between addresses and was more likely to be sold than not. The huge rise in the MVRV ratio also meant that a pullback could be imminent as holders could try to book profits.
While the price action was encouraging, the decline in the average coin age meant that the sellers were not yet out of the fight.