SUI hits record $885M TVL – 23% rally possible, but ONLY IF…

Key Takeaways

What is driving bullish sentiment around SUI despite its sideways price movement?

 A record-high TVL and a bullish falling wedge pattern are fueling optimism for a potential breakout.

What could threaten SUI’s upward momentum in the near term? 

A sharp drop in network revenue and DEX volume may undermine the current bullish trend.

Sui [SUI] is gaining attention in the crypto space as its Total Value Locked (TVL) hits a new all-time high of $885.59 million.

This milestone was reached even as the asset’s price has remained flat over the past three days. A well-known crypto analyst highlighted the achievement in a recent post on X (formerly Twitter).

Analyzing price momentum

This rising TVL appears to be strengthening SUI’s current price action as it nears a bullish pattern. This hints that the native token has strong upside potential.

Meanwhile, the impact is already visible on SUI’s price, as it jumped 2.15% over the past 24 hours. At press time, the asset was trading at $2.47, a key level for SUI.

The recent price uptick has pushed SUI much closer to a bullish breakout. According to AMBCrypto’s technical analysis, SUI has formed a bullish falling wedge pattern on the daily chart and is currently on the verge of a breakout.

If SUI maintains its current upward momentum and breaks out of the bullish pattern, its price could rise by over 23%, potentially reaching $3.10. However, if the breakout fails, the asset may either continue its downward trend or remain in consolidation.

At press time, SUI’s Average Directional Index (ADX) stood at 48.88, well above the key threshold of 25. This signals strong directional momentum. 

Despite this, the Supertrend indicator remains above the current price, suggesting that SUI is still in a downtrend.

Traders’ strong belief in long positions 

Given the current market sentiment, it appears that traders are closely following the trend by heavily betting on long positions, as revealed by the derivatives platform CoinGlass.

Notably, SUI’s major liquidation levels stand at $2.377 on the lower side (support) and $2.503 on the upper side (resistance). At these levels, traders are over-leveraged, holding $13.82 million worth of long positions and $3.07 million worth of short positions.

This indicates that the current sentiment for SUI is bullish, and positions near the $2.503 level are on the verge of liquidation.

Red flag for SUI price 

The only metric that appears to be a red flag for SUI is the significant decline in Sui Network’s revenue and DEX volume.

According to DeFiLlama, the network’s revenue has dropped from $168,527 to $15,899, while DEX volume has plummeted from $1.479 billion to $503.32 million, as of writing.

These two fundamentals seem to be concerning for the asset and have the potential to shift the current trend.