SUI has proven to be a standout layer-1 blockchain platform in 2024, occasionally outperforming Ethereum and Solana [SOL] in certain aspects.
During the October market recovery, it reached an all-time high, drawing the attention of sidelined investors due to the subsequent price retracement.
Consequently, many traders opened long positions around the $1.6 mark, leading to a significant increase in liquidity at this support level.
Alphractal has highlighted the substantial liquidity at the $1.6 support, suggesting a potential scenario of mass liquidation if the price falls below this critical level.
Could SUI Face Liquidation Soon?
Alphractal noted that significant liquidity was also accumulated around the $2.2 level, where long positions were established and later liquidated during a recent market correction. The question arises – will the $1.6 support face a similar outcome?
Examining the price chart reveals a daily order block (OB) established in April, which has served as a reliable support for SUI in September and October, particularly at the $1.6 level (indicated by the white zone).
Moreover, the 50-day EMA (Exponential Moving Average) has emerged as crucial dynamic support in mitigating price declines during late October and November.
In essence, $1.6 has been a significant support level in Q4, attracting significant buying interest and leveraged long positions. A breach below could potentially lead SUI towards the next support at $1.4.
The demand for SUI in the spot market has been relatively flat, evident from the sideways movement of the OBV (on-balance volume) indicator, indicating that SUI’s price direction may hinge on market sentiment post the US election.
Divergent Market Sentiment
Santiment data also reflects a sense of caution in the short-term market outlook. Since October, SUI’s open interest (OI) rates have been declining, with market sentiment reflecting a downward trend at present, hinting at cautious speculation among SUI traders in anticipation of the US elections.
Nevertheless, there has been observable interest from whales looking to increase their positions despite the prevailing caution. This positive sentiment is reflected in the Retail vs Whale Delta metric, which compares whale long positions against those of retail traders.
In conclusion, while there is some interest from whales in SUI, the current price level is pivotal, as a drop below the $1.6 support could expose several highly leveraged investors to potential losses.