Current data shows that Sui [SUI] is trading at a weekly low of $4.32, following a nearly 5% decrease in value over the past 24 hours. This decrease coincided with a pullback in the broader altcoin market following the inauguration of Donald Trump, which was seen as a sell-off event.
Despite this decline, there has been a significant increase in Decentralized Finance (DeFi) activity on the SUI blockchain, potentially aiding the altcoin in recovering from recent bearish trends.
Surge in SUI’s DeFi Trading Volumes
DeFiLlama data reveals that daily DeFi trading volumes on the SUI network spiked to $672M on January 20th, marking the second-highest level ever recorded. This surge indicates a rising interest in the DeFi protocols operating on the network.
Simultaneously, stablecoin market capitalization on the SUI network currently sits at $421M, a significant increase from $301M at the beginning of the year.
Despite the uptick in trading volumes, the coin’s Total Value Locked (TVL) has dropped by almost 12% from its previous all-time high earlier this month, now standing at $2.285 billion.
Analysis of SUI’s Price Trends
As per the volume profile indicator, SUI’s price is at a critical juncture, attracting significant trader attention. With the failure to maintain the support at the 0.786 Fibonacci level ($4.56), there is a possibility of a drop towards $3.48.
That said, a resurgence in buying activity defending the support level could potentially lead to a rally towards $7.69, establishing a new price peak for the coin.
The Chaikin Money Flow (CMF) indicator hints at a potential exhaustion among buyers post a rapid surge in purchasing activities over the last three weeks, potentially reinforcing the bearish trends.
Long Liquidations Impacting the Downtrend
An increase in long liquidations is one of the factors counteracting the buying pressure on SUI. Coinglass reports liquidations exceeding $15M in the previous three days, leading to forced selling that has exerted downward pressure on prices.
The rise in forced liquidations has coincided with a decline in Open Interest, now standing at $1.56 billion after hitting a record high on January 19th.
A closer look at SUI’s liquidation heatmap covering a 48-hour period shows an elevated risk for more long positions in case of further price declines.
Nevertheless, a concentration of liquidation orders at $4.51 might reverse the trend and trigger a price increase, potentially eliminating these short positions.
The influence of long traders on SUI’s price movements could be temporary, especially with funding rates dropping to a weekly low of 0.0066%, indicating reduced demand for long positions that could lead to decreased price volatility.