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SUI Price Drops Amid $15M Long Liquidations

Sui (SUI) has experienced a sharp decline, dropping nearly 5% in the past 24 hours to a weekly low of $4.32. This price drop follows a broader altcoin market pullback triggered by Donald Trump’s inauguration, which turned into a sell-the-news event.

Despite the downturn, the SUI blockchain’s DeFi activity is surging, potentially aiding the altcoin’s recovery from bearish trends.

DeFi Activity on SUI Network Surges

According to DeFiLlama, daily DeFi volumes on the SUI network soared to $672 million on January 20, marking the second-highest level in history. This surge indicates growing interest in SUI-based DeFi protocols.

Additionally, the total stablecoin market capitalization on the SUI network stands at $421 million, a significant rise from $301 million at the beginning of the year. However, the total value locked (TVL) has dropped by 12%, now sitting at $2.285 billion compared to its all-time high earlier this month.

SUI Price Analysis: Key Levels to Watch

SUI is at a critical support level, attracting traders’ attention. The price failed to hold the 0.786 Fibonacci support at $4.56, which could lead to a further drop to $3.48.

However, if buyers step in and defend the support level, SUI could rally to $7.69, potentially reaching a new all-time high. The Chaikin Money Flow (CMF) indicator suggests that buyers may be losing momentum after a rapid surge in buying activity over the last three weeks, which could reinforce the bearish outlook.

Long Liquidations Fuel Downtrend

A major factor weighing on SUI’s price is the surge in long liquidations. Data from Coinglass reveals that over $15 million worth of long positions were liquidated in the last three days, leading to forced selling.

As a result, SUI’s open interest has dropped to $1.56 billion after reaching an all-time high on January 19. The liquidation heatmap suggests further downside risk, with key long positions at risk if prices continue to fall. However, a liquidation cluster at $4.51 could provide a potential bounce-back opportunity.

Outlook: What’s Next for SUI?

Despite the price drop, a decline in funding rates to a weekly low of 0.0066% suggests reduced demand for longs, which may stabilize price volatility.

If bearish trends persist, SUI could continue its downward movement. On the other hand, renewed buying pressure and strong DeFi growth might support a potential recovery.

Conclusion:

Traders should closely watch key support and resistance levels while considering the ongoing market trends and liquidation data. The coming days will be crucial in determining whether SUI can regain momentum or face further losses.

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Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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