The Sui price has pulled back and entered a bear market after falling 35% from its peak in May. It was trading at $2.80, giving it a market capitalization of over $9.4 billion.
Sui Token Unlock and Stablecoin Weakness
The SUI token price may be at risk of further downside in the coming days as the network prepares to unlock millions of tokens.
It will unlock 5.2 billion tokens worth over $156 million on July 1. This unlock will be part of the scheduled monthly process that will continue until 2030, when the supply limit of 10 billion will be reached. Sui has over 3.39 billion tokens in circulation.
A token unlock is often seen as a bearish catalyst for a cryptocurrency because it increases the number of coins in circulation. This is usually a risky move, especially when demand is limited.
READ MORE: Sei Price Prediction: Can This Token Surge 145% and Hit 2024 High?
Sui price is also at risk as its stablecoin ecosystem shows some weakness. Data compiled by Artemis shows that the stablecoin supply has decreased by 47% over the last 30 days, to $833 million.
Similarly, the number of transactions has plunged by 60% in this period to 11.4 million. Also, the number of stablecoin addresses has dropped by 12% to 256,000.
Falling stablecoin transactions and supply are a risky sign for a crypto project, as it indicates a decline in utility. A potential reason for this is the recent Cetus Protocol hack that cost millions of dollars.
Sui Price Technical Analysis
The daily chart shows that the Sui price has crashed over the past few weeks, moving from a high of $4.29 in May to its current level of $2.7. It has moved below the 50% Fibonacci Retracement level at $2.9326.
Sui has also formed a mini death cross pattern as the 50-day and 100-day Exponential Moving Averages (EMA) have crossed each other. It has also formed a descending channel connecting the lower lows and lower highs.
The MACD indicator has remained below the zero line. Therefore, the token is likely to continue falling as sellers target the 61.8% retracement level at $2.30. A move below that level will confirm the downtrend, potentially to the key support level at $1.7168. A move above the resistance level at $3 will indicate further gains.
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