Assessing SUI’s price bounce as a $82.8mln token unlock looms
Price bounce was an encouraging sight for SUI but traders have reason to remain bearish.
Sui will see an $82.8 million token unlock on the 1st of January, a recent AMBCrypto report revealed. This is a monthly unlock that keeps adding to the potential sell pressure on the altcoin, and could curb any attempts to make a bullish trend reversal.
The 1-day chart revealed a range formation in place since November. This range, highlighted in purple, extended from $1.30 to $1.68.
Moreover, the mid-range level was at $1.49. Sui [SUI] was trading at $1.50 at the time of writing.
This was a bullish development.
A flip of the mid-range resistance to support generally signals an upcoming rally toward the upper range extreme, at $1.68 in this case. Sui bulls have pushed prices above the mid-range level for the first time since the 17th of December.
Despite the recent gains, the OBV was moving sideways and lacked a noticeable upward trend. At the same time, the trading volume has been well below the 20-day moving average over the past two weeks.
It was a warning sign to SUI bulls, though the RSI signaled a shift in momentum.
Assessing the bullish scenario
SUI saw multiple bullish structure breaks in recent days. Bitcoin [BTC] was also knocking on the doors of the $90k psychological resistance. It is possible that short-term momentum would favor the bulls.
In this scenario, traders can use a retest of the $1.50 level to buy the altcoin, targeting the $1.68 range highs. A drop below $1.43 would invalidate the bullish idea.
AMBCrypto does not think this is the more likely scenario, due to the higher timeframe seller dominance.
Traders’ call to action- Stay sidelined
Sui bulls are not strong, as the OBV and dwindling volume indicated on the 1-day timeframe. The short-term bullish idea was risky, even though there was some lower timeframe demand.
Traders can wait for the breakout past the mid-range resistance to fail before going short, or they can remain sidelined. A drop below $1.43 would signal a bearish structural shift in the price action.
Final Thoughts
- The Sui price bounce might not be sustainable due to the sell pressure from the token unlock.
- The short-term momentum for SUI and Bitcoin was an allure that traders must not FOMO into.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
