SushiSwap's 21% spike in October probably seems unusual for the majority of investors as the token has been moving in a lifeless range for the last few months. However, on-chain data suggested that a large spike in volatility should have been expected.
Santiment previously highlighted how SushiSwap saw an unusual spike in network growth, with the number of new addresses created reaching an eight-month high. In addition to a surge of new addresses on the network, the old addresses have shown the activity we last saw back in July.
🍣 If you had #Sushiswap on your trading radar to begin October, it was likely because you saw the sudden major spike in network growth on @santimentfeed. Since the spike of 276 new $SUSHI addresses were created on October 2nd, price has jumped +21%. 📈 https://t.co/nGpSmHIR5a pic.twitter.com/YoPedy2pLR— Santiment (@santimentfeed) October 6, 2022
The spike on all fundamental values was a direct sign of an upcoming spike in volatility. Unfortunately, the poor price performance did not attract a high number of investors. Considering open interest on various trading platforms, speculators and investors do not consider Sushi a good investment opportunity; hence, they ignored the on-chain signs.
It is fair to say that the most recent price spike has been fueled by the general market recovery rather than the fundamental growth of the network. As for now, Sushi has to gain a foothold above the 50-day moving average in order to continue the movement upward to the next resistance level.
According to volume profiles, investors are ready to support the continuation of the rally, at least while the market remains relatively stable. However, the gap between the resistance might be too large for bulls to cover it, especially while the DeFi industry remains in a poor state.
The most likely scenario from here is consolidation or slow growth toward the 200-day moving average. Sushi would need to go through a 70% price increase in order to reach it or consolidate for at least two months.