Sui Token Drops 1.75% Amid 58.35 Million Token Unlock

Sui [SUI], currently within a descending channel pattern, recently experienced a rally of over 20% and was approaching the upper boundary at the time of reporting. However, the token faced significant selling pressure due to historical resistance at the upper boundary and the recent massive token unlock by the Sui Network. On July 1st, the Sui Network is set to unlock 58.35 million tokens valued at $164.44 million, representing 1.72% of SUI’s total market capitalization. This unlock has raised concerns among analysts and market participants, as large token unlocks can increase selling pressure and potentially trigger a short-term price dip due to the increased token supply.

At the time of writing, SUI was trading near $2.72 after a 1.75% price dip in the past 24 hours. This decline in price was accompanied by a decrease in investor and trader participation, as indicated by a 10% drop in trading volume compared to the previous day. This reduction in trading volume suggests lower participant confidence and reduced interest in the token. According to technical analysis, SUI currently appears bearish, attributed to the ongoing token unlock and the breakdown of a key support level. The asset had been holding along an ascending trendline during its upward move from the lower boundary to the upper boundary. If SUI successfully closes a four-hour candle below the ascending trendline, there is a strong possibility that the asset could drop by 10% to 12% to reach the $2.40 level. This bearish outlook and market sentiment for the token could potentially change if it breaks out of the descending channel pattern; otherwise, it is likely to remain sideways or in a downtrend. At press time, the asset was trading below the 50-day Exponential Moving Average (EMA) on the daily time frame, indicating that it will remain in a downtrend as long as the price stays below this level.

Traders appear to be aligning with the bearish outlook, as reported by the on-chain analytics firm. Traders were over-leveraged at the $2.67 support level, with $12.45 million worth of long positions. $2.848 is another over-leveraged level, where traders have built $16.66 million worth of short positions. Combining this, data suggests that bears are currently in control and believe that SUI is unlikely to break above the $2.848 level anytime soon. Investors and long-term holders appeared to be accumulating and taking advantage of the asset’s price dip. Data from the Spot Inflow/Outflow showed that exchanges across the crypto landscape have recorded an outflow of $16.40 million worth of SUI tokens. This substantial outflow, amid the current market sentiment, suggests potential accumulation and indicates that it may be an ideal time for long-term accumulation.