SUI's Risk-to-Reward Ratio Hits 1:5 as Token Plummets 30%

SUI's risk-to-reward ratio has reached 1:5, raising concerns among traders. The native token of the Layer-1 blockchain has dropped over 30% in a month, sparking fears of a deeper crash. Crypto analyst Jason Pizzino warns that SUI is following a historical pattern that previously led to a 58% decline.

Short sellers are dominating the derivatives market, with the token's funding rate turning negative. This suggests that traders are betting against SUI, adding further downward pressure. The token's price has recently recovered to $2.38 but could fall again if it fails to stay above $2. Pizzino believes that SUI could drop to $1.60 or even between $1.10 and $1.20, returning to its previous low points.

Technical indicators also point to potential further losses. SUI has fallen below the 0.50 Fibonacci retracement level, signaling weak support. The Moving Average Convergence Divergence (MACD) has turned negative, reflecting the bearish sentiment. If this trend continues, SUI could drop another 25%, sliding to the 0.236 Fibonacci level at $2.49. However, if buyers step in and defend the 0.382 Fibonacci retracement level, the token might avoid further decline and even recover toward $4.56.