Yerevan (CoinChapter.com) — SushiSwap decentralized exchange’s (DEX) native token SUSHI dropped 22 percent since June 15, just as a fresh wave of crypto declines initiated on the news from the US Federal Reserve.
Bitcoin takes SushiSwap lower
Last Wednesday, the US Federal Reserve shifted the schedule of the planned interest rate hikes from 2024 to 2023. This announcement sent Bitcoin into a new downward spiral, wherein it wiped 19 percent off its market cap. As of Monday, the BTC/USD exchange rate was down to as low as $32,790. On Wednesday, the rate was $40,499.
Bitcoin’s decline also surfaced as the US dollar index rose to its two-month high. The flagship cryptocurrency popularly serves as a hedge against a falling US dollar. But since Wednesday, the Fed’s decision to hike benchmark lending rates has brought interest back to the US dollar, sapping investors’ appetite for anti-fiat assets like Bitcoin (and gold).
SUSHI, which typically moves in the direction of Bitcoin trends, traded at $7.65 ahead of the European session Monday, June 21, compared to $9.64 on June 15.
Fundamentally, SushiSwap looks strong as a DEX project. Despite its recent declines, SUSHI’s daily transaction average daily volume came around a decent $173 million, according to Messari. However, its rival and original blockchain Uniswap is leaps ahead in market cap ($11 billion against SushiSwap’s 971 million). Still, the SushiSwap is slowly catching up as a serious contender in the DEX space.
SushiSwap lately enjoyed some positive news as well. However, when iTrust, the capital allocation provider within DeFi insurance, announced it would launch on the DEX on June 23.
Technically, SUSHI/USD stands on the cusp of a price breakdown, testing a support range that looks loose against the prospect of an imminent death cross formation.
A bounce back from the support range could have the SUSHI/USD test its 20-day exponential moving average (20-day EMA; the green wave) at around $9.36. A breakdown, on the other hand, risks crashing the pair to the next line of support at around $5.13.
History of SushiSwap
SushiSwap DEX lets users swap tokens, earn rewards for yield farming, and more. Owning the native token SUSHI enables participants to offer changes to how the platform operates and vote on other participants’ proposals.
SushiSwap was created as a fork from the Uniswap DEX in 2020 by a pseudonymous “Chef Nomi.” The initial launch was surrounded by much controversy, as Chef Nomi removed $13 million worth of funds from the liquidity pools.
Chef Nomi tried to justify his actions as something positive for the project. But many users accused him of “pulling an exit scam.” As a result, Chef Nomi left the project after returning the pulled funds. Sam Bankman-Fried, head of Alameda Research crypto derivatives firm, got control of the DEX.
After all the controversy died out, SushiSwap stabilized, rising on the ubiquitous wave of DeFi. The DEX charges a 0.3 fee for transactions and no withdrawal fee as of the moment.
SushiSwap DEX experienced considerable losses, along with its native token SUSHI. The latter lost 155 percent of its value throughout June. Even the impressive daily transaction volume is overshadowed by the losses in the crypto sector as a whole.
The future of SushiSwap will be determined in the upcoming sessions, based on the possibility of Bitcoin and the crypto market as a whole to recover.