In the space of 48-hours, the SushiSwap price has gone from the verge of breaking down to the cusp of breaking out on the upside. On Tuesday, decentralized market-maker SushiSwap (SUSHI/USD) put on its best one-day performance since May, jumping from $10.98 to $13.32.
As a result, SUSHI has clawed back nearly all of the losses it suffered during last week’s wipeout. Furthermore, the price has recaptured the major moving averages and is close to testing the four-month downtrend. Which, if cleared, could set the SushiSwap up for a material rally.
On Sunday of last week, Ethereum-based AMM SushiSwap was trading at $14.30 and looked likely to extend even higher. However, on Monday, the price failed to advance, and we know what happened on Tuesday. When Bitcoin (BTC/USD) dropped 18%, SUSHI slumped twice as much, losing 35% from Monday’s high before rebounding from the $9.22 low to finish the day down 20% at $10.90. Since then, the SushiSwap price has been rudderless, bouncing between $9.80 and $12.20, although the direction was clear yesterday. However, this morning, the price is lower by 2.40% and still respecting the resistance of the downtrend from May’s high.
The daily chart highlights two clear trend lines. The longer-term downtrend is currently visible at $13.50 and is the first line of resistance. Successful clearance of this trend would constitute a bullish breakout and potentially target the may high of $22.52, around 75% above the last price.
The second trend line sits below the market at $9.93. Above the trend, the 200-day moving average at $10.30, the 100 at $11.06 and the 50 DMA at $11.47 reinforce the significant price support. As long as the SushiSwap price remains above this confluent band of support, the prospects are positive.
On that basis, I maintain a bullish outlook for SUSHI unless the price drops below $9.92. In this event, a return to the July lows around $6.50 becomes a possibility.
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