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

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• SUSHI exhibited encouraging price action for long-term bulls and shifted the weekly chart bullish with a move past $0.8.
• Findings from on-chain metrics suggested the market might not be as healthily bullish as the price action showed.

SushiSwap [SUSHI] saw a great leap in trading volume in recent hours. The price leaped higher by just over 70% and the trade volume by more than 500%. While it pointed toward intense sentiment, it could also be the frantic scramble of an altcoin late to the bull party.

Read SushiSwap’s [SUSHI] Price Prediction 2023-24

This sparked concerns that SUSHI had embarked on a pump to draw in speculators before the larger holders dumped their holdings. Was this the case? Time will tell, but as things stand, the $1 support level could be vital in the coming days.

The HTF market structure shift revealed a false break could be unlikely

Source: SUSHI/USDT on TradingView

While it was not guaranteed to be this way always, a liquidity hunt usually retraces most of the move quite quickly. Therefore, the past few days’ gains should have receded at either the local highs at $0.816 (orange) or the psychological $1 resistance.

They didn’t and instead managed to reach a high of $1.3. In the coming days, a drop below the $1 and $0.8 levels could be a warning for bulls that the rally was over. However, if the $1 mark was flipped to support, it could see further gains recorded in the coming weeks.

The Fibonacci levels showed that SUSHI could go as high as $1.74 and still retain a higher timeframe bearish bias. This highlighted the strength of the bear market in the past two years.

The on-chain metrics conveyed information that bulls could find disheartening

Source: Santiment

The exchange flow balance saw a large downward spike to denote SUSHI withdrawn from exchanges. On 1 November, 2.96 million SUSHI moved out and suggested long-term holders added to their holdings. Yet, the mean coin age has been falling in the past six weeks.

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This meant SUSHI saw steady token movement between addresses and was more likely to be sold than not. The huge uptick in the MVRV ratio also meant a pullback could be imminent as holders could attempt to book profits.

Overall, even though the price action was encouraging, the decline in the mean coin age meant sellers were not out of the fight yet.