SUI Ends Week on a Downward Note
The SUI cryptocurrency experienced a price decline over the weekend, potentially marking the start of a bearish trend. This pullback follows a historic high of $4.92 on Friday, fueled by market hype.
Technical Indicators Suggest Bearish Divergence
Several factors contributed to the anticipated SUI pullback. Notably, a bearish divergence emerged between the price and the RSI indicator. This divergence, where price reaches a new high but RSI fails to follow suit, often signals incoming sell pressure, especially after a strong rally.
Investor Sell-Off and Derivatives Market Sentiment Point South
Supporting the bearish outlook is the recent outflow of $12 million worth of SUI from spot markets, a significant change from Friday's $16 million inflow. Additionally, the derivatives market showed negative funding rates, indicating increased short selling activity, particularly on Crypto.com.
Sui TVL: A Double-Edged Sword
While positive Total Value Locked (TVL) typically aligns with bullish price action, SUI's situation is more nuanced. Although TVL reached a new dollar value peak of $1.91 billion, the coin's price has been dropping since September. This could suggest profit-taking by some holders.
However, TVL decline doesn't always guarantee a price drop. During April-June, SUI TVL increased while the price remained bearish.
Long-Term Potential May Limit Downside
While some level of sell-off is likely due to bullish exhaustion, the extent of the decline might be limited by SUI's long-term prospects.
Analyst Optimism and Institutional Interest
SUI's rapid growth suggests market acceptance, attracting figures like Raoul Pal who highlighted the network's latency and Grayscale's Sui trust as signs of institutional interest. This optimism could establish a floor price for SUI and limit downside pressure.
Looking Ahead: Potential Pullbacks and Top 10 Aspirations
Despite potential price corrections, bullish sentiment suggests long-term strength for SUI. The cryptocurrency's market cap continues to climb, currently ranking 16th. Aggressive growth could propel it closer to the top 10 in the coming months.
December 2024, Cryptoniteuae