SUI Faces $80 Million Unlock: Can Bulls Maintain Key Resistance?

As we approach the end of the year, Layer-1 blockchain Sui has struggled in a bearish market, showing a significant decline of 63.9%. The sentiment surrounding SUI may worsen, especially with increased supply expected due to capital inflows.

Key Takeaways

SUI is facing an $80 million unlock, which could negatively impact its price.
Recent unlock data indicates $80.41 million worth of tokens will enter circulation.
The market has seen increased net outflows, suggesting caution among investors.
Despite bearish sentiment, certain on-chain metrics show some signs of bullish interest.

SUI Faces $80 Million Unlock: Can Bulls Maintain Key Resistance?

The Impact of Token Unlocking on SUI

Recent data from DeFiLlama indicates that more Sui [SUI] tokens are set to hit the market soon, amounting to $80.41 million. This represents 1.11% of SUI's total supply and 1.48% of its circulating float. Such a significant influx of tokens could put downward pressure on prices, which are currently at $1.41.

Additionally, early contributors will receive 0.25% of this supply, valued at around $12.58 million. Historically, these contributors tend to sell their tokens, which may contribute to the overall bearish sentiment in the market.

SUI Unlock Value
Source: DeFiLlama

If more sellers coordinate their exits, the price could drop even further. Currently, SUI's price action has not fully shown the effects of this impending unlock, as the asset managed a 3.45% gain in the last day. However, trading volume decreased to $291.41 million, a drop of 8.99%, indicating weakening momentum.

Sellers Begin Exiting the Market

Recent data from CoinGlass reveals that spot investors are pulling back from their positions, with a total net outflow of $5 million over the last 48 hours. This represents the first major outflow in over a week, with selling peaking on December 27th, signaling that investors may be becoming more cautious about SUI's future.

SUI Price Chart
Source: TradingView

Technically, SUI is encountering significant resistance near a critical zone on the chart. If it fails to break above this resistance, it may fall to lower price levels. On a positive note, if it successfully breaks out, there’s potential for SUI to reach the $3.1 level again, a price last seen on October 6 before a major liquidation event.

Signs of Bullish Pressure Despite the Bearish Mood

Even though the bearish sentiment prevails, some indicators show that there is still bullish interest in SUI. Recent on-chain data indicates a notable rise in total value locked (TVL) in SUI, which has reached $922.25 million in the last day with total inflows amounting to $24.8 million. This could signal renewed confidence among certain investors regarding SUI's short-term outlook.

SUI TVL
Source: DeFiLlama

Additionally, off-chain traders appear to be adopting a bullish stance based on SUI/USDT perpetual contracts. CoinGlass notes an increase in long-position volumes, with a rising positive funding rate, suggesting that long traders are gaining more ground in open positions. SUI's outlook in the near term will significantly depend on market sentiment leading up to the token unlock.

Conclusion

In summary, SUI faces a crucial period as it approaches an $80 million token unlock while navigating a generally bearish market. The next moves will be pivotal in determining whether bulls can maintain control or if sellers will push the price down further.