Key Takeaways
Despite suffering a 25% steep decline from its all-time high, Sui’s (SUI) price has managed to hold above $3. This development coincides with a modest market recovery as the Federal Reserve, led by Chair Jerome Powell, kept interest rates unchanged.
While the pause in rate hikes provided some relief, some saw it as a dovish sign. However, this is not the case with traders aiming to profit from SUI’s price action.
By the look of things, these traders believe that macroeconomic stability may not be enough to help the token avoid another correction. But will this be the case? This analysis, supported by several indicators, looks at the possibility.
On Tuesday, Jan. 28, SUI’s price fell to $3.65. As of this writing, the cryptocurrency’s value has increased by 7% in the last 24 hours while changing hands at 4.01.
Initially, the lack of buying pressure suggested that SUI could drop below $3. But yesterday, amid the above Fed decision, the market came alive again.
For some, the broader rebound is a positive sign for many cryptos. However, the SUI funding rate shows otherwise.
When funding is positive, the perpetual contract price trades at a premium above the spot price. This means that long-positioned traders pay funding to shorts, and the sentiment is bullish.
On the other hand, negative funding implies that the perpetual contract price trades at a discount below the index price, and shorts pay funding to longs. According to Santiment, the SUI funding rate has sharply declined to -0.005%.
From CCN’s findings, this bearish sentiment could be linked to SUI’s technical outlook. On the daily chart, SUI’s price keeps trading within a descending channel as it remains restricted between lower highs and lower lows.
Besides that, Bull-Bear Power (BBP) is in the negative region. BBP measures the strength of bulls compared to that of bears.
When it is positive, bulls are in control. But in this case, it appears that bears still have the upper hand and might ensure that SUI’s price fails to notch a strong bounce off the support line.
Further assessment of the same chart shows that the Money Flow Index (MFI) has continued to decline. The MFI uses price and volume to measure the level of buying and selling pressure around a cryptocurrency.
An increase in the MFI indicates rising buying pressure. A decrease, on the other hand, signifies distribution. If sustained, SUI’s price might undergo an extended price decline.
Using the Fibonacci retracement indicator, the altcoin remains at the same spot as the 0.382 nominal pullback region. With buying pressure extremely low, SUI could find it challenging to climb higher.
If this trend continues, the token could sink to $3.17 in the short term. On the other hand, if SUI breaks above the descending channel, as shown above, this might not happen.
Instead, the price might rally above the 0.618 golden ratio and hit $4.90. This could also be the case if the MFI reading drops below 20.00.
SUI will be oversold in that scenario, and a bullish reversal could be on the cards.