SushiSwap Bull Market Emulating Uniswap with Benefits?
It is very much a bull market for SushiSwap at the moment, which is an interesting depiction of the interest from investors in decentralized finance (DeFi) protocols.
SushiSwap is a DeFi platform that operates as an Automated Market Maker (AMM) which was leveraged from the leading DeFi platform and rewards participants but also award them voting rights through the issuance of SUSHI token, which has been of huge interest to those wishing to participate in the development of distributed financial services.
Over the past two days, SushiSwap has been trading above the moving averages of 50, 100 and even 200 which is a clear indication that there is a positive sentiment toward the DeFi token.
This is quite an interesting development considering that in 2020, when SushiSwap was launched in its native Japan, its founder, Chef Nomi, withdrew approximately $14 million worth of Ethereum from the development fund, giving rise to a possible opinion that, as with many new innovations, its founder was looking to hedge his bets, and see if his creation succeeded and keep some collateral in case it didn’t.
Here we are only a year later and after a period in which a huge increase in the interest in Ethereum as not only a cryptocurrency but as a technologically advanced blockchain in its potential use scenario as a highly advanced piece of computer science that can move the entire financial system forward into the digital age.
SushiSwap copied Uniswap’s computer code, reduced the fee payable to “liquidity providers,” and made up the difference with SUSHI that would be paid to SUSHI holders, and some 90% of each distribution of SUSHI was to be set aside in a development fund when the token was first launched.
This week, the relative strength index (RSI) has been showing a strong position for SushiSwap, and the moving averages have appeared to show a bullish direction this week so far.
On Sunday, there was a distinct direction toward immediate resistance at the $11.524 price level, and it was possible from many chart patterns that if the price manages to break it, it could reach a lofty $20. Today, SushiSwap languishes below the levels of Sunday’s bullish market, at $10.89, however it is still above the support line of Sunday October 17 which was $10.48.
This may appear to be relatively steady, but there has been a constant uptrend in interest for SushiSwap since the summer of this year.
Indeed, directly after facing a massive downtrend in the significant cryptocurrency fall in May 2021, SushiSwap has been able to give its user a considerable return, and at the end of May,
Sushiswap saw range-bound price behaviour between $13.90 and $14.62, which is remarkable considering the downward volatility that affected the entire cryptocurrency market in mid-May following Elon Musk’s infamous tweet.
Perhaps one of the drivers of the levels of interest in SushiSwap has been the constant refinement of Uniswap, whose V3 protocol is set to make absolutely huge advancements in the smart contract capability of the Ethereum blockchain, as well as make massive inroads for liquidity providers via Layer 2 topography.
The concept of the SUSHI token was very similar to the Uniswap coin, however instead of just being able to earn rewards, holders also keep accruing fees so perhaps given the strident technological advances of Uniswap, there are investors looking to see if SushiSwap can follow this path whilst at the same time providing rewards and allow participation in fee accrual.