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SushiSwap (SUSHI) could advance even more in the ongoing bull market, but the risk remains high

SushiSwap (SUSHI) could advance even more in the ongoing bull market, but the risk remains high

SushiSwap (SUSHI) has advanced from $0.59 above $5 since the beginning of November, and the current price stands around $4.8. This cryptocurrency could increase even more in the ongoing bull market, but the current risk/reward ratio is not good for long term investors, in my opinion.

Fundamental analysis: SushiSwap is attempting to increase its dominance with new features

SushiSwap is a decentralized cryptocurrency exchange build on the Ethereum blockchain, which is very similar to Uniswap in both appearance and function. Some analysts even say that SushiSwap represents the evolution of Uniswap because better it aligns incentives for network participants by introducing revenue-sharing & network effects

Sushiswap was officially launched in August 2020, and it wasn’t taken seriously at first due to the food meme. The founder of SushiSwap is Chef Nomi, who wanted to create something similar to Uniswap but with a more community-driven vision.

Chef Nomi took Uniswap’s code that is completely open-sourced, and he modified it by adding the SUSHI token. Chef Nomi completely removed himself from SushiSwap after he broke the community’s trust by selling $14M of SUSHI for ETH, but the situation started to stabilize when SushiSwap’s admin key was transferred to Sam Bankman-Fried, founder of FTX.

SushiSwap operates by smart contracts, and it is essential to say that no single entity controls the protocol. Users can swap cryptocurrency for another cryptocurrency on the SushiSwap platform that offers SUSHI token rewards to those who stake their tokens.

SushiSwap relies on the Automated Market Maker (AMM) system, and it differs from Uniswap because it is more focused on building a community-centric decentralized exchange. Sushiswap has become one of the largest decentralized exchanges, and it is also attempting to increase its dominance with new features, along with a partnership with Yearn.finance.

From its lowest price of just over $0.50 at the beginning of November, SUSHI has advanced above $5, and the current price of this DeFi token stands around $4.8.

“I would say the evolution of this current momentum in terms of significant interest in the topic will continue through 2021. I think some of the technology from this DeFi phase will certainly be utilized in some more regulated way throughout 2021 towards 2022,” said analyst Andrew Peel, Morgan Stanley’s head of digital asset.

This cryptocurrency could advance even more in the ongoing bull market, but the current risk/reward ratio is not good for long term investors, in my opinion.

Technical analysis: SushiSwap  has made a massive jump in a short-time period

Data source: tradingview.com

The current resistance levels are $5, $5.5, and $6; $4 and $3 represent the current support levels. If the price jumps above $5.5, it would be a signal to buy SushiSwap, and the next price target could be around $6.

On the other side, if the price falls below $3, it would be a firm “sell” signal and possibly a trend reversal sign.

Summary

SushiSwap has made a massive jump in a short-time period, and the correction phase could be around the corner. For now, there is no sign of the trend reversal but, if you decide to trade SushiSwap, you should consider that the price could also weaken in the upcoming days.

The post SushiSwap (SUSHI) could advance even more in the ongoing bull market, but the risk remains high appeared first on Invezz.

Source: INVEZZ

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