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This month, SUSHI’s price fortunes have been inconsistent. In reality, though the alt traded slightly below its ATH level of $23.38 in the first half of May, the crypto has fallen drastically in recent days as a result of the market massacre. SUSHI lost more than half of its value in just six days.
However, at the time of writing, some signs of recovery could be observed on the price charts, indicating that all was not lost. The cryptocurrency has risen by more than 30% in the last 24 hours, demonstrating this.
Unfortunately, if not supported by sound fundamentals, market swings are little more than a flash in the pan. Fortunately, in the case of SUSHI, the recovery has been aided not just by the latter, but also by institutional attitudes and ecosystem-centric upgrades.
A recent Santiment analysis emphasised the robustness of SUSHI’s on-chain metrics.
The good, bad, and ugly of SUSHI’s on-chain metrics
Take, for example, active addresses. Despite the aforementioned market-wide deflation, SUSHI has continued on an upward trend. This remained true even when the weekend arrived, indicating the extraordinary interest SUSHI has been generating.
Even when metrics did fall over the course of the weekend or following the market fall, at press time, they had recovered somewhat, with the likes of Trading Volume holding steady to support the uptick in network activity following a sharp fall a few days ago.
These findings, however, do not imply that everything is well and dandy. For example, at the time of writing, exchange inflows were still excessively variable after a large increase a few days previously. When the market dropped and SUSHI’s value dropped, many holders surrendered, as indicated by “a large number of people depositing tokens to exchanges to exit positions.”
Furthermore, the Network Profit-Loss and MVRV measures seem to place emphasis on the magnitude of the aforementioned capitulation.
Corresponding to the altcoin’s value decline, the NPL saw a steep drop, highlighting the fact that a major portion of SUSHI had been shifted to exchanges at a loss. Furthermore, Santiment claims
“SUSHI’s 30-day MVRV ratio dipped to almost -44%, indicating that all addresses that have acquired SUSHI in the past 30 days were – on average – down 44% on their initial investment.”
Doesn’t it seem like bad news? Perhaps, but there is a silver lining here, as the latter statistic also indicated that SUSHI appeared to be grossly undervalued. As a result, if the cryptocurrency price continues to rise, there will be plenty of room for growth, at least until the MVRV reaches a plateau.
Finally, there is the issue of narratives. Certainly, the price of SUSHI plummeted, and yes, many holders capitulated and sold their stakes. Unfortunately, one way to look at it is that the altcoin has now shrugged off the market’s weak hands. When the upswing arrives, it will be led by the market’s most powerful players.
Aside from price performance and on-chain measures, there are several more reasons to be positive about SUSHI’s long-term prospects. Indeed, as discussed in a previous piece, organic developments such as the advent of Kashi financing and Margin Trading on SushiSwap’s BentoBox have the potential to spark more crypto gains.
SUSHI – A tripling to come?
Finally, it would seem that institutions and crypto-asset fund managers are taking the alt seriously as well, with Arca CIO Jeff Dorman being one of them. In a recent interview with Business Insider, Dorman sought to clarify that while SUSHI has underperformed this year, that won’t be the case for long going forward.
In fact, Dorman is confident that SUSHI’s token will triple in the long term, especially since the token accrues economic value in the form of dividends to token holders.
SUSHI, therefore, might not really be a bad bet in the long term.