SUI, the rising altcoin, recently experienced a notable 12% surge within a 24-hour window, rekindling investor optimism. However, this upward momentum carries a significant caveat: if SUI’s price reaches the critical level of $3.48, it could trigger approximately $96 million in liquidations. This looming liquidation event mainly threatens short traders who have positioned themselves for the price to decline, potentially forcing a dramatic short squeeze.

The recent rally has injected a dose of excitement into the market, but it’s important to understand the underlying dynamics at play. Liquidations occur when leveraged traders are unable to maintain their positions due to adverse price movements, causing forced closure of trades by exchanges. For SUI, hitting the $3.48 price point would trigger a cascade of such liquidations among short sellers betting against the coin. These forced exits could, in turn, push the price even higher as the market absorbs the sudden buying pressure.

Despite the positive price action, some indicators suggest caution. The Chaikin Money Flow (CMF), which measures the volume-weighted average of accumulation and distribution over a set period, currently reflects negative momentum for SUI. This implies that while the price is rising, broad-based buying interest is lacking. Instead, the recent price gains may be driven largely by traders covering short positions, rather than fresh capital entering the market. This dynamic often signals that the rally might not be sustainable unless stronger buying support materializes.

If the outflows persist and genuine investor interest remains subdued, SUI could face pressure to reverse its gains. The absence of solid inflows can leave the price vulnerable to a retracement, which could erase some or all of the recent rally. Traders should be wary of this potential pullback, as it may bring the price down to previous support levels near $3.13 or even $2.91.

Currently, SUI is trading just below a key resistance zone at $3.33. Historically, this price point has acted as a formidable barrier, preventing the altcoin from gaining further upward traction. Given the current market conditions and the negative CMF reading, a breakthrough above this resistance may be challenging in the short term. Failure to cross this level could result in a period of consolidation or even a price decline.

On the technical front, the Parabolic SAR indicator, which helps identify potential trend reversals, is nearing a pivotal point. If the indicator flips below the candlesticks, it could signal the beginning of an uptrend, supporting a possible breakout past the $3.33 resistance. Should this happen, it would pave the way for SUI to test the critical $3.48 level once again.

Breaking past $3.48 would be a significant event, as it would negate the current bearish outlook and unleash a wave of short liquidations. The forced closure of short positions could create a feedback loop, driving prices higher as demand surges to cover those positions. Such a short squeeze can often lead to rapid and sharp price increases in a relatively short timeframe.

However, traders and investors should remain cautious. While the possibility of a breakout exists, the underlying market sentiment remains mixed. The negative CMF and the resistance at $3.33 suggest that without new buying interest, the rally might stall or reverse. It is crucial to watch volume levels and other momentum indicators to gauge whether this price move can be sustained.

The volatility in SUI’s price action highlights the risks involved in trading leveraged positions, especially in the altcoin space. Both short and long traders face the challenge of unpredictable price swings that can lead to rapid liquidations. For those holding short positions, the approaching $3.48 mark represents a potential point of significant financial risk.

In summary, SUI’s recent price increase has brought it to a pivotal moment. The coin’s ability to break through resistance levels and sustain momentum will determine whether it can continue climbing or if it will fall back into consolidation. The potential $96 million liquidation event at $3.48 underscores the high stakes involved for traders betting against the altcoin. For now, the market remains in a delicate balance, with short-term technical signals suggesting a possible breakout, while volume indicators urge caution.

Investors and traders should monitor key price levels closely, particularly $3.33 and $3.48, to navigate this volatile environment effectively. Staying informed about market sentiment and technical trends will be essential in managing risk and capitalizing on potential opportunities as SUI’s price action unfolds.