The once-hopeful outlook for the SUI cryptocurrency is now under threat, as recent market trends suggest a significant downturn. In the past 24 hours, over $600 million worth of SUI has been withdrawn from various protocols, signaling a dramatic shift in investor sentiment.

This massive outflow has prompted speculation that SUI’s price may soon plunge to the $1 range, erasing gains it has made since September 2024. With bearish market conditions in full swing, both technical analysis and on-chain data suggest that further declines could be on the horizon.

Massive Liquidity Outflows Signal a Market in Turmoil

SUI’s liquidity has taken a serious hit, with the Total Value Locked (TVL) dropping from $1.991 billion to $1.381 billion. This 30% decline in TVL indicates a large-scale sell-off as traders look to minimize losses or cash in on profits amid a bearish trend. As TVL measures a blockchain’s valuation, this drop reflects the market’s deteriorating confidence in the asset.

More than $600 million worth of SUI tokens were sold in just 24 hours, sending shockwaves through the market. This shift aligns with a surge in daily transactions, which increased from a range of 4.3 million to 5.2 million. However, a closer look at this transaction volume reveals that much of it is tied to selling pressure, indicating that investors are fleeing from SUI in large numbers.

Is Retail Activity Fueling the Downtrend?

While the selling pressure is intense, retail traders seem to be the primary drivers of this market movement. According to recent data, active addresses on the SUI network remained relatively stable between March 2nd and the time of writing, staying at around 1.5 million. This suggests that the majority of selling activity is coming from short-term traders rather than long-term holders, who have largely kept their positions intact.

This trend could imply that retail investors are scrambling to exit their positions as SUI’s value declines, possibly driven by fear of a deeper market correction. In contrast, institutional investors or long-term holders seem to be waiting for a more favorable price point before making any moves.

Technical Analysis Points to a Potential Drop to $1

Looking at the charts, SUI’s price is showing signs of a further downtrend. The cryptocurrency recently breached a key support level, and technical analysts are now predicting a potential 58% decline. If the price fails to hold above its current support levels, there is a real possibility that SUI could drop to the $1 region.

The first critical support level is set at $2.18, while the second lies at $1.67. If these levels fail to provide a solid rebound, SUI’s price could fall rapidly, possibly reaching as low as $1.01. This would wipe out all the gains the cryptocurrency has accumulated since September of last year.

Derivatives Market Reflects Seller Dominance

The bearish sentiment is not confined to spot trading alone. Derivatives data paints a similarly grim picture, with Open Interest (OI) showing a significant drop. OI, which represents the total number of outstanding derivative contracts, has fallen by 13.17%, now sitting at $523 million. This indicates that more traders are betting against the asset, contributing to the downward pressure.

Additionally, liquidation data reveals a stark contrast between long and short positions. Over $8.24 million worth of long positions on SUI have been liquidated, compared to just $508,000 worth of short positions. This imbalance highlights the dominance of sellers in the market, signaling that further price declines could be inevitable unless there is a shift in market sentiment.

Will SUI Recover or Continue to Fall?

As the market shows no immediate signs of stabilizing, many investors are left wondering whether SUI will be able to bounce back from this downturn. Given the current trend, it seems that the path of least resistance is downward, with continued selling pressure pushing the price lower.

However, the situation remains fluid, and much depends on how the market responds to potential support levels in the coming days. If SUI can hold above $2.18 and $1.67, there may still be a chance for a recovery. On the other hand, if these levels break, the $1 drop could quickly become a reality, signaling a complete reversal of SUI’s recent bullish momentum.

In conclusion, the outlook for SUI remains uncertain as the market grapples with a series of negative indicators. For now, the likelihood of a further price decline seems high, and traders will need to remain cautious as the situation develops.