SushiSwap (SUSHI) Looking Tasty, But is it Time to Bite?
Hungry for SUSHI?
If you have an appetite for sushi, then maybe SushiSwap (SUSHI) is the crypto coin for you. SUSHI has been looking more and more appetizing, as a very bullish Golden Cross indicator has formed recently. A Golden Cross is a technical chart indicator that happens when a short-term moving average (50-day MA, gray line) crosses over a longer-term moving average (200-day MA, purple line). Most technical analysts interpret this as a change in sentiment from bearish to bullish, and it could signal an upturn in the market.
Ready to take a bite?
But this does not mean that you should rush in immediately and buy SUSHI. There are more factors that you need to take into consideration before taking a bite of this crypto. In order to better understand, we need to look at a broader perspective of SUSHI. It looks like it is in a consolidation or accumulation phase at the moment. Financial instruments, such as stocks, bonds and cryptocurrencies, usually behave in a similar way. There are market cycles that repeat themselves over and over in almost all types of financial securities – and SUSHI is no different.
*Golden Cross spotted in SUSHI’s Daily Timeframe, but the current price is still weak.
This market cycle can be divided into 4 phases:
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- Neglect/Accumulation/Consolidation phase
- Advancing/Mark-up phase
- Topping/Distribution phase
- Declining/Mark-down phase
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SUSHI’s Market Cycle Reset
After finishing the last phase in the market cycle, it usually resets and returns to Phase 1, thus creating a new market cycle. This is very evident in the SUSHI chart above, where it began with Phase 1 before 2021. Phase 2 began to pick up in early 2021, and this lasted until March, then came Phase 3 (topping/distribution), which lasted until May when the mini-crypto crash occurred and almost the entire market dumped. This crash initiated Phase 4 (declining/mark-down), and now, the market cycle has been reset for SUSHI. We are most likely back in an accumulation/neglect/consolidation at the moment.
When to bite?
Currently, it would be best to wait and let things simmer down for a while. Let the volatility die down, let the price consolidate more, and let the trading volume slowly lighten before getting into a trade. We will see the signs when SUSHI begins heading into its next advancing/mark-up phase. The Golden Cross that has formed is just one positive sign, but we need more positive signals before we act. The sentiment for SUSHI is still neutral/bearish, as it is still trading below the 200-day moving average. It’s best to wait for the bull chef to prepare a better setup for your SUSHI platter.
SushiSwap is a decentralized exchange, automated market maker (AMM) with the governance token, SUSHI. It ranks as the 76th-largest cryptocurrency, with a market capitalization of $1.297 Billion, which was down 10 spots in mid-September, when it rallied to a 4-month high of 16.20.
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