Home Altcoins News SUI Token Faces Bearish Pressure: Key Red Flags to Watch

SUI Token Faces Bearish Pressure: Key Red Flags to Watch

SUI Token

SUI, the native token of a Layer-1 blockchain, has recently experienced a steep price decline, dropping by more than 30% within the last month. As a result, traders and investors are growing increasingly concerned about the future of the token. Crypto analyst Jason Pizzino has raised an alarm, warning that SUI may be following a familiar pattern that previously resulted in a major price crash. But what does this mean for SUI’s future?

Jason Pizzino’s Analysis: A Repeating Pattern

Jason Pizzino, a well-known crypto analyst, points out that SUI’s recent price behavior bears a striking resemblance to past patterns, which preceded significant crashes. Specifically, Pizzino explains that the token’s recent decline has lasted longer and fallen deeper than other corrections seen in the current market cycle.

This pattern is similar to what happened in April 2024, when SUI dropped by a significant 58% from its previous high. If the pattern repeats itself, the token could be in for another round of panic selling, which could send the price even lower. While SUI briefly recovered to $2.38, Pizzino warns that this rebound could be short-lived. Without sustained buying pressure, the price could potentially fall to as low as $1.60 or $1.10, revisiting previous lows.

Bearish Sentiment Intensified by Short Sellers

Another concern that Pizzino raised is the increasing dominance of short sellers in the market. SUI’s funding rate has turned negative at -0.01%, a clear indication that a significant portion of the market expects the token’s price to continue its downward trend. Short sellers make profits when the price drops, and their presence can add significant downward pressure on the asset.

Currently, SUI is trading at $3.58, marking a small 5.6% increase over the past 24 hours. However, given the growing dominance of short positions, the token remains at risk of further declines, especially if the bearish sentiment persists.

Technical Indicators Reveal Weakness

From a technical perspective, SUI appears to be struggling to maintain any significant upward momentum. The token has dropped below the 0.50 Fibonacci retracement level, a crucial support zone that could signal a potential reversal. Falling below this level suggests that the asset is facing weaker support and could continue its decline.

Additionally, the Moving Average Convergence Divergence (MACD) indicator has turned negative, which is another bearish sign indicating that the market sentiment is tilted toward selling. If this trend continues, SUI could see a further drop, possibly reaching the next Fibonacci support level at $2.49. This would represent an additional 25% loss from its current price, intensifying concerns among traders and investors.

Can SUI Recover?

While the outlook for SUI is currently bearish, there is still a chance for recovery. If the token can maintain its price above key support levels, particularly the 0.382 Fibonacci retracement level, there could be potential for a reversal. A strong buying force might prevent further declines, allowing SUI to regain upward momentum.

If the token manages to defend its support levels and attract new buyers, SUI could recover towards $4.56, regaining some of the lost ground. However, much of this depends on how the broader market behaves and whether the ongoing bearish pressure begins to subside.

Conclusion

The future of SUI remains uncertain as it faces mounting pressure from short sellers and weak technical indicators. If the token continues to follow its past patterns, further declines are likely, potentially leading to a drop to $1.60 or even lower. However, if the token manages to hold key support levels and see renewed buying interest, it could still recover. Investors should remain cautious, carefully monitoring market developments and technical signals to assess SUI’s potential for a rebound or further downfall.

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dan saada

Dan hold a master of finance from the ISEG (France) , Dan is also a Fan of cryptocurrencies and mining. Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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