SUSHI, once the poster child of the DeFi space, is apparently losing its significance and weight in the market. It had touched its all-time high of $23.3 back in March 2021. Since then it has been on a steady slide. As mentioned in an earlier article, unlike most other prominent coins which had lost value due to market sentiments while keeping their fundamentals intact, it seems SUSHI has been deteriorating and can be expected to fall further on such weak fundamentals.
SUSHI: A dish not for everyone
With larger players simply looking to trade off of it, it seems Sushiswap‘s dream is no longer shared by others. Technically speaking, since last time, it has fallen down below its crucial support level of $4.2. And, since then it has been oscillating in a range of $2.8-$4.
Interestingly, the coin has shown a recovery of nearly 20% over the past 30 days. Despite that fact, it can safely be said, a long position at these levels is equivalent to taking a bet on a horse that has a history of losing, expecting it to win.
On-chain metrics also point towards a similar scenario. According to data from Santiment, Supply held by top addresses as a percentage of total supply fell all through the last quarter of the 2021 calendar year. And, since the beginning of 2022, it has been stagnating at those lower levels. Thus, threatening to break down any time.
Notably, its valuation metrics have been going haywire too. The NVT Ratio for SUSHI has been high despite its falling prices – suggesting that daily transaction volumes have been painstakingly low which led to several jumps in the ratio over the past two months.
Well, thanks to the poor network volumes as demonstrated by the NVT Ratio, on-chain liquidity for the network has also suffered.
In line with the above inferences, Daily Active addresses have also been drying up according to data from Santiment. As per DeFillama, even its TVL has gone for a toss. Thus, currently standing at a little more than half of what it was at its ATH back in November 2021.
Light at the end of the tunnel?
However, there is one metric which sheds some positivity on the whole picture. Sushiswap’s Development activity on Github has been rising on the charts. This does come as a surprise with such weak fundamentals across the board.
So overall, much like the actual Japanese dish, it seems like SUSHI isn’t for everyone. Investors must be wary of this coin since it is treading dangerously below crucial support levels and a fall from hereon can practically wipe out invested capital.
The development activity looks promising but it is yet to be seen how much of that is actually reflected on prices.