The SushiSwap price has made a spectacular recovery as investors rush to buy the dip. The SUSHI token is trading at $1.5930, which is the highest it has been since May 11th. The token has jumped by more than 52% from its lowest level this week. This performance is in line with what most cryptocurrencies have done. For example, Gala has jumped by 76% in the past 24 hours, while the GMT, ApeCoin, and Maker prices have risen by over 70%.
SushiSwap is one of the biggest players in the decentralised finance industry. At its peak, the platform had billions in total value locked (TVL) and thousands of users. However, like all other DeFi tokens, the coin has been under pressure after the tragic implosion of Terra LUNA and Terra USD. It has also struggled as investors worry about the ongoing tightening of the Federal Reserve. As such, they are avoiding fighting the Fed.
Therefore, this recovery is happening as investors buy the dip. There is also the notion of getting greedy when others are fearful and being fearful when others are greedy. However, there is a likelihood that the bearish trend is still intact. Historically, there is a situation known as a dead cat bounce, which happens during a bear market.
The daily chart shows that the SUSHI price has been in a strong bearish trend. The controversies surrounding the Frog Nation have contributed to the sell-off. The decline moved below the important support at $2.76, which was the lowest level in March. Now, the coin has formed what looks like a bullish engulfing pattern. It also remains below the short and long-term moving averages.
Therefore, in my view, there are two possible scenarios. First, the SushiSwap price could rise by 76% and retest the resistance at $2.76. The other scenario is where this is a dead cat bounce. If this happens, the coin will drop and retest this week’s low.
This post was last modified on May 13, 2022, 09:59 BST 09:59