SUSHI Market Sentiment

Social Sentiment

Let's first look at LunarCrush to get a very general idea of market sentiment for SUSHI

Introduction

Currently, the markets are in a Fear or Bear phase, where usually people are waiting for a capitulation or already have started DCA-ing and accumulating assets at lower prices. Or in the majority of cases, retail investors are afraid of investing in risky assets like cryptocurrencies and go "risk-off" by selling all their "risky" assets and moving to different things such as bonds using their fiat money.

It seems that overall Bullish sentiment is in the negative, as expected now that the whole market is down. Let's back up those claims by looking at Bitcoins sentiment...

It seems that Bitcoins sentiment is recovering with the Bullish sentiment being much higher than that of SUSHIs as well as the Bearish Sentiment decreasing. This is expected as BTC is the asset that moves the entire market...

Off-Chain Sentiment

Let's also look at what off-chain demand tells us...

What this tells us is that there are more buys than sells in the past day. Not by much, and not across multiple exchanges + dexes, but specifically on Binance there is higher buying pressure than selling pressure. What it tells me is that people are very much interested in accumulating SUSHI at prices around ~ 1-1.4 $ source.

On-Chain Sentiment

Dex Buys/Sells

Let's now look at the on-chain sentiment of buys/sells across different LP pairs.

We can see that when the price of SUSHI was climbing there were more buys than sells, which is counter-intuitive, but this is what tends to happen in bull markets. Over time when the price would correct people would sell and in some cases buy upon small recovery/relief rallies. Ever since SUSHI crossed below the 9$ price mark it has been mostly sells, until there's a data issue where I can no longer get IN-flows for the SUSHI token. Also, there's an interesting spike on the week of the 9th of May which correlates with the de-pegging of UST and potentially is the capitulation event until proven otherwise.

Swap Volume

Let's look now at SUSHI swap volume to get a better gauge of also the volume of transactions that SUSHI. What we can see is that there's some correlation between volume and price, but it's not that significant. The interesting spikes here are:

1. 27th of December -> Spike in Price and how there's a week of lag (delay) 3rd of January for a spike in Volume.
2. A massive spike on the 18th April, which looks more like a data issue than a real volume estimate, but it could be that some whale bought a massive amount of SUSHIor sold a massive amount ofSUSHI` on the way down.

Staking Metrics

What we can see in terms of SUSHI staked daily is that, other than the initial massive spike, we've been in a downwards trend, with some revival around last summer May-June 2021, but ever since we're back to a continued downtrend which also follows the price of SUSHI.

In this graph, minus the data issue, we can see that there's periodical there's been more reward Harvesting than staking itself, which indicates there could be more selling or swapping pressure against SUSHI. This is more evident on the monthly view.

On the other hand, users can lock up their staked SUSHI to get xSUSHI (liquid staking), what we can see in terms of minting of xSUSHI to burning it for SUSHI is that there's a continuously decreasing trend for minting, where users choose the principal SUSHI token. This is more visible in the mint/burn ratio than in the grouped bar chart above, but I decided to include both in order to see when there was mint pressure vs burn pressure. It seems to me that there's more burn than mint overall, which indicates potentially to users taking advantage of arbitrage, then ustaking xSUSHI for SUSHI 1:1.

Summary

In this investigation, we've looked at multiple metrics to tell us what is going on in terms of the demand for SUSHI from inception and especially during this bear market. It seems that SUSHI going onto multiple chains may have hurt its price potential, but it has most definitely not hurt its ability to bring forth innovative products. I feel like SUSHI has a high potential to survive past this bear market just due to the fact that it has a strong community of users. Maybe it will never reclaim its all-time-high, but it could most certainly reclaim a 5-8 $ price range if the market survives regulation and CBDC fears.

Evaluation

I could've analysed more data from off-chain sources, but I deemed the following metrics to be sufficient to give us a whole-istic view of what the sentiment for SUSHI currently is.