Four reasons why SUSHI holders will have a bullish week despite SEC's move
- SushiSwap price is forming a base around $1.05 with a bullish divergence, hinting at a bullish week.
- On-chain metrics point to an outlook supporting buyers with a 10% to 20% upside for SUSHI holders.
- Invalidation of the optimistic outlook occurs if the Sushi token price flips the $1.00 support level into a resistance floor.
SushiSwap price undid the early March gains in the last week after the SEC subpoenaed the platform’s head chef Jared Grey. As a result of this announcement, the token collapsed by roughly 18%. However, this week things are starting to look better for the decentralized exchange (DEX) and SUSHI holders for four key reasons.
Also read: Sushi DAO faces subpoena from SEC, calls for $3 million USDT legal fund
SushiSwap price hints at reversal
SushiSwap price on the daily chart shows that it produced two key lower lows on March 10 and 25. Looking at the Relative Strength Index (RSI) and the Awesome Oscillator (AO) indicators, one can see higher highs, indicating an increase in momentum for the same periods.
This non-conformity is defined as bullish divergence and often results in a reversal in the SushiSwap price trend or short-term rally.
The first upside target for SUSHI holders is $1.14, which is the midpoint of the 23% collapse between March 18 and 25. If the momentum for SushiSwap price remains strong and unflinching, the $1.25 hurdle is next.
In total, these targets would provide investors with 10% to 20% gains if they purchased SUSHI tokens at the current level.
SUSHI/USDT 1-day chart
On-chain metrics hint at a bullish future for SUSHI token holders
The number of 24-hour Active Addresses has created a one-month high after shooting from 338 on March 21 to 556 on March 23. The fact that this spike occurred after an 18% selloff in SushiSwap price denotes accumulation by interested whales.
Hence, this uptick in 24-hour Active Addresses, suggests the possibility of an impending bullish move for SUSHI token price.
%20[09.31.56,%2027%20Mar,%202023]-638154961461818285.png)
Adding credence to this accumulation from high networth investors is the Whale Transaction Count. This index tracks transactions worth $100,000 or more and serves as a proxy of investments for smart money investors.
The fact that the metric rose to 14 on March 25, following a 23% drop in SushiSwap price, further supports the idea of accumulation mentioned earlier.
 [09.35.59, 27 Mar, 2023]-638154935893492905.png)
SUSHI Whale Transaction Count
To take things to the next level, readers can note that the number of addresses holding between 1 million and 10 million SUSHI tokens increased from 26.11% to 30.51% between March 18 and 22. This spike in the number of addresses indicates but one thing - interest from high net worth investors.
Between March 22 and March 27, the number of these addresses declined from 30.51% to 28.29%, which could indicate that some of these investors decided not to take the risk. Regardless, there is a clear accumulation from the whales’ perspective, cementing the possibility of an uptrend for SushiSwap price.
 [09.36.31, 27 Mar, 2023]-638154936122857503.png)
SUSHI Supply Distribution by balance of addresses
While all signs point to a bullish future for SushiSwap price, a failure to push higher could denote an inherent uncertainty from investors. If SUSHI token slides below the $1 psychological level and fails to overcome it quickly, it would invalidate the bullish thesis.
This move would scream weakness and trigger investors to offload their holdings, catalyzing a 10% slide to $0.901.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
