The Sui (SUI) token recently surged by 30%, reaching a high of $3.30 on November 12, 2024, generating optimism among investors. However, the rally appears to be losing momentum as the token’s price has dropped back to $2.97. This recent price drop has raised concerns among traders about the sustainability of the bullish momentum.

Despite the token’s impressive run-up, the latest decline follows a broader market correction, with many cryptocurrencies taking a breather after weeks of gains. This pullback in SUI’s price could be attributed to profit-taking from short-term holders, but technical and on-chain metrics suggest that deeper issues might be at play.

Declining Market Indicators Signal Weakening Momentum

Several key indicators point to a weakening of the bullish trend in Sui. Open Interest (OI), which measures the level of speculative activity in a cryptocurrency, surged to $644.30 million on November 10. However, within just two days, this figure plummeted to $493.53 million, signaling that the speculative buying that fueled the rally is subsiding.

In technical analysis, a drop in Open Interest often signals a weakening trend. As the OI declines, it typically indicates that market participants are losing confidence in the continuation of the rally. This sharp reduction in OI is one of the primary reasons why SUI’s recent uptrend has lost steam.

Another concerning metric is the Weighted Sentiment, which tracks the overall market sentiment towards a cryptocurrency based on social media mentions and news coverage. After showing positive sentiment earlier, SUI’s sentiment has now turned negative. This shift indicates that a larger portion of discussions around the token is now bearish, which could translate to lower demand and further downward pressure on the price.

Technical Analysis: Selling Pressure Intensifies

From a technical perspective, the Sui token faces increasing selling pressure. The Bull Bear Power (BBP) indicator on the 4-hour chart, which measures the relative strength of buyers and sellers, has turned negative. This suggests that the bears (sellers) are gaining control over the market, and selling pressure is rising.

The BBP indicator is often used to determine whether a token is in a bullish or bearish trend. When the reading is positive, it indicates that buyers have the upper hand, pushing prices higher. However, with the recent negative shift in the BBP, the Sui token is facing mounting downward pressure from sellers.

Possible Price Targets: $2.26 or $3.34?

Based on the current technical setup, SUI could potentially fall to the next support level at $2.26 if the selling pressure continues to build. The Fibonacci retracement tool, a common method used to identify potential price levels during pullbacks, suggests that this price target is within reach if bearish sentiment persists.

However, all is not lost for SUI. Should buying pressure return to the market and shift the momentum back in favor of bulls, there is still a possibility of a price rebound. If demand increases, SUI could see a recovery and might even revisit the $3.34 mark, which would require strong upward momentum to break through the resistance at the current price levels.

Conclusion: Caution for Sui Investors

While Sui’s recent rally was impressive, the current market indicators point to a possible decline in the token’s value. The drop in Open Interest, negative sentiment, and increasing selling pressure are all signs that the uptrend might be fading.

For Sui holders, the next few days could be critical. If the price fails to hold above key support levels, a deeper decline may follow. However, if buying pressure resurges, there may still be hope for a price recovery. Traders should keep an eye on market sentiment and technical indicators for signals of either a continued downturn or a potential rebound.