Sui Price Struggles Below $4: Is More Downside Ahead?

Sui is currently facing challenges as it remains below the $4 threshold, raising concerns about potential further declines due to waning bullish momentum and an impending token unlock.

Key Takeaways

Current Price Movement: Sui (SUI) has dropped 4.6% in the last 24 hours, trading at $3.67.
Market Trends: The broader crypto market is experiencing a cooldown, with negative movements from major cryptocurrencies like Bitcoin and Solana.
Token Unlock Impact: A significant token unlock on August 1 introduced $162 million worth of SUI tokens to the market, affecting demand and prices.
Future Unlocks: Additional daily token unlocks over the next week, each exceeding $1 million, may exert further downward pressure on SUI's price.
Market Sentiment: Despite current challenges, some analysts suggest the possibility of a bullish reversal in the near future.

Sui price struggles under $4, is more downside ahead?

Market Overview

According to market data from crypto.news, the Sui token (SUI) has experienced a decline, dropping by 4.6% in the last 24 hours. Currently trading at $3.67, SUI has faced considerable downward pressure, falling approximately 16.3% since its peak of $4.30 in July.

This decline occurs amidst a broader market pullback, where major cryptocurrencies like Bitcoin, Solana, and XRP have also seen minor losses. The recent rally that occurred over the weekend appears to be losing momentum.

Bitcoin
Solana
XRP

Token Unlock Concerns

The current downward price trend is intensified by an influx of SUI tokens into the market following the largest token unlock on August 1. This release added tokens worth $162 million, which accounts for about 1.3% of the total supply. As part of a long-term schedule, over 55 million tokens are set to be unlocked each month until 2030, creating a persistent supply increase.

The availability of more tokens has dampened trader interest, as evidenced by a 15% decrease in open interest over the past week. Funding rates have dropped significantly, falling from 0.075% in July to 0.0083% now, according to Coinglass data.

Even though SUI remains up roughly 5% this month, the upcoming series of daily token unlocks poses risks for additional declines.

Future Outlook

Data from Tokenomist indicates that SUI will experience daily token unlocks over the next seven days, with each release exceeding $1 million. This increase in circulating supply alongside other major cryptocurrencies, such as SOL, WLD, TIA, DOGE, TAO, and AVAX, could sustain the downward pressure on SUI, particularly in a market that is already showing signs of weakness.

Rising supply during a market consolidation phase often leads to price drops, as short-term holders cash out profits and leveraged positions are unwound.

SUI token

Market Resilience

Despite these current pressures, optimism within the market hasn’t completely disappeared. Technical analysts, such as Ali Martinez, have pointed out the formation of an inverse head and shoulders pattern in SUI’s price, which may signal a potential bullish reversal above $4.45.

Furthermore, there is an increasing institutional interest in SUI, highlighted by recent treasury allocations and ecosystem partnerships. For instance, Mill City Capital, a Nasdaq-listed firm, has committed around $316 million to a SUI-focused treasury strategy this month, which helps foster a positive long-term outlook.

In conclusion, while SUI currently faces challenges due to rising supply and an overall fragile market sentiment, strong buying activity and renewed investor confidence could potentially raise the token’s price and restore a positive trend in the near future.