The price of Sui (SUI) has recently faced significant downward pressure, fueling concerns about a possible extended correction in the near term. After a promising rally that pushed the token above the $4 mark, SUI reversed course and slipped below critical support levels, intensifying bearish sentiment among traders and investors. Currently, SUI trades around $2.75, down more than 5% in the last 24 hours, retreating sharply from its recent high of $3.51. Despite an impressive 255% gain over the past year, SUI’s short-term momentum has noticeably weakened, casting doubts over its immediate prospects.

Technical analysis reveals that SUI recently broke down from a triangle chart pattern, triggering a wave of selling that dragged the price back to a key support level near $2.78. This support acted as a floor back in late March, making it a crucial line in the sand for traders. Should SUI fail to hold this level on a daily closing basis, a further decline toward $2.24 is likely. This target coincides with the 23.6% Fibonacci retracement level drawn from SUI’s all-time high of $5.35 down to the year-to-date low of $1.71, suggesting that the correction could deepen if the bears maintain control.

Momentum indicators present a mixed but generally cautious picture. The Relative Strength Index (RSI) is nearing oversold territory at around 33.6, yet it has formed a bullish divergence—a subtle hint that a price reversal could be possible. However, the Moving Average Convergence Divergence (MACD) remains firmly in bearish territory with no immediate signs of an upward shift in momentum. This combination points to a market that is tentative, with selling pressure still dominant but some technical signals suggesting a potential pause or bounce.

The derivatives market data adds to the cautious tone. Open Interest (OI) for SUI futures has dropped sharply, now standing at $1.15 billion—the lowest level in almost two months and a 43% decline from its May peak of $2.05 billion. This significant decrease in OI signals a withdrawal of capital and reduced speculative activity in the derivatives space. Furthermore, the OI-weighted funding rate has fallen to 0.0060%, reflecting diminished bullish enthusiasm.

Short positions have gained dominance in trading volumes, comprising 55% of taker activity compared to 45% for longs. This shift is underscored by the long/short ratio, which currently sits at 0.82, reinforcing the prevailing bearish sentiment among market participants. Unless there is a reversal in sentiment, these trends suggest continued downside pressure on SUI’s spot price.

Adding to the bearish outlook, a classic technical head-and-shoulders pattern has formed on SUI’s daily chart. Market analyst NebraskanGooner highlights this pattern as a potential driver for SUI to fall to around $2.20 by early July. The breakdown from the right shoulder corresponded with a rejection at the 99-day simple moving average, emphasizing a failure to maintain important technical support. The former support zone between $3.00 and $3.10 now acts as a significant resistance barrier. If bulls cannot reclaim this level soon, the bearish setup may play out fully, extending the downward trend.

Fundamental indicators are also painting a bleak picture. Network activity has dropped dramatically, with daily transaction volumes falling from over 19 million to just 9 million, and daily active accounts plunging from 1.66 million to about 320,000 according to SuiVision data. This steep decline signals weakening user engagement and suggests that the earlier price rally may have been driven more by speculation than by genuine adoption or utility growth.

While futures market exposure shows a modest rebound with open interest near $1.2 billion, the broader outlook remains cautious. Market participants seem to be awaiting clearer signals—both technical and fundamental—before committing to significant new positions.

Looking ahead, the $2.78 support level is critical. A successful bounce from this zone could open the door for a recovery toward the psychological $3 mark and potentially the monthly high near $3.55. Conversely, if SUI breaks below this support and fails to retest it convincingly, a drop to $2.20 or even lower is a real possibility.

Longer-term forecasts remain somewhat optimistic, with analysts like CoinLore projecting a price range between $3.77 and $5.80 by the end of 2025. However, these potential gains are tempered by near-term technical weakness and declining on-chain activity, which suggest that SUI’s short-term trajectory remains fragile.

For now, traders and investors should exercise caution, closely monitoring key support levels, derivatives market signals, and network fundamentals. High-conviction moves are best reserved until the token shows signs of stabilizing momentum and renewed investor confidence.