The crypto market continues to reel under volatility, and SUI is currently at the center of heavy speculation. With traders aggressively building 25x leveraged short positions, SUI’s near-term path looks increasingly uncertain. As the token tests critical support zones, questions arise: will it stabilize, or is a larger breakdown forming?

Data from OnChain Lens shows that institutional players like Abraxas Capital are significantly increasing short exposure. The firm has reportedly gained over $55 million in unrealized profits through short positions on major assets including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Hyperliquid (HYPE), and Sui Network (SUI), primarily using the HyperLiquid exchange.

This build-up in shorts reflects a broader market strategy favoring downside protection as many top cryptocurrencies have shown signs of weakness following a strong May rally.

Key Support Zone at $3 in Play

SUI’s price hovered around $3.00 at the time of reporting — a level that traders are closely watching. Technical analysis shows that holding this support could enable a rebound toward $3.90, or even a retest of the previous high near $5.36.

But if the $3.00 mark gives way, the token could slide toward $2.00, and possibly even to the $1.38–$1.50 zone, which served as historical support during March and April corrections. A failure to maintain this floor could amplify bearish sentiment.

The Moving Average Convergence Divergence (MACD) histogram still shows green bars, suggesting bullish momentum hasn’t fully disappeared. Yet, there’s growing concern that a break in the pattern of higher lows could signal the start of a longer-term downward trend.

Leverage Builds as Traders Brace for Volatility

The liquidation heatmap for SUI paints a picture of mounting tension. According to CoinGlass data, over $13.78 million in short positions remain vulnerable to liquidation if the price manages to break into the $3.39 resistance cluster.

This cluster, ranging from $3.05 to $3.39, is packed with highly leveraged positions—some with 10x, 25x, or even 50x leverage. A quick price surge past $3.06 could trigger a short squeeze, forcing rapid buy-backs as short sellers exit.

On the flip side, long traders have also accumulated positions between $2.70 and $2.95. If the price declines instead, these positions could be liquidated, triggering a wave of panic selling that may accelerate the fall.

This dual buildup—heavily shorted resistance zones and densely packed long support ranges—has set the stage for a potentially violent move, depending on which group is forced to unwind first.

Bearish Lean but Room for Surprise Upside

Despite most indicators pointing toward bearish sentiment, the market is not entirely without hope. If short traders begin covering positions due to an unexpected bullish push, SUI could rally quickly.

That’s especially true if the $3 level holds, giving bulls a chance to build upward momentum. A move toward $3.90 in such a scenario is not out of the question. However, for this to occur, SUI needs to generate strong volume and clear the liquidation zone between $3.05 and $3.39.

Short interest alone doesn’t determine the outcome, but it amplifies any moves in either direction, making every price level more critical than usual.

Market Sentiment Shows Traders Leaning Bearish

The behavior of leveraged traders often acts as a short-term sentiment indicator, and in SUI’s case, sentiment leans decisively bearish. This doesn’t guarantee a breakdown, but it does increase the risk of extreme volatility.

If SUI fails to reclaim the $3.10–$3.30 range soon, bearish traders may double down. However, such aggressive shorting also creates vulnerability. If just a few key levels are breached to the upside, it could lead to a chain reaction of short liquidations — essentially a short squeeze.

In this context, the coming days are likely to be crucial for SUI. Whether it rebounds or dips further depends on how both sides of the market react to price shifts and liquidity traps.

Final Thoughts

SUI is at a crossroads. A critical support level is being tested, while large institutional and retail traders continue to load up on shorts. The extreme use of leverage is increasing the probability of a sudden and sharp price swing in either direction.

While bears currently control the narrative, the possibility of a surprise reversal cannot be ruled out. Traders should monitor price action around the $3.00 zone closely. A firm hold could turn the tide in favor of bulls, while a breakdown might open the doors to a deeper correction.

As crypto markets enter a period of uncertainty, assets like SUI with concentrated leverage exposure will remain high-risk and high-reward zones for speculators and investors alike.