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SUI Price Risks Breaking 200-Day Support — Unlock Raises Doubts About Supply Centralization

Last Updated May 3, 2024 11:45 AM
Valdrin Tahiri
Last Updated May 3, 2024 11:45 AM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • SUI’s token unlock ignited a debate about its centralized supply allocation.
  • SUI has increased alongside an ascending support trend line for nearly 200 days.
  • Will SUI break down from this support trend line, or will it bounce instead?

The SUI price has fallen over 50% since its all-time high and is at risk of breaking down from a nearly 200-day ascending support trend line. Additionally, a token unlock on May 3 created more selling pressure.

With the wave count and price action in disagreement, will the SUI price bounce and save this trend line, or is more downside likely in May?

SUI’s Unlock Characteristic

SUI has a total supply of 10 billion tokens and a circulating supply of 2.33 billion. On May 3, roughly 800 million SUI tokens were unlocked,  which is approximately 34% of the circulating supply.

This was part of a cliff release for investors that took part in Series B funding  buying SUI at a price of $0.50, more than 50% lower than the current price of $1.10. It seems that some of the participants have created selling pressure, since the SUI price is falling. Until May 2026, there will be a monthly linear unlock of 200 million tokens.

SUI Vesting Schedule
SUI Vesting | Credit: DeFiLlama

As part of the vesting schedule, Releases to Series A funding participants will end in November 2025, to those in Series B in May 2026 and then early contributors will receive their final tokens in November 2026.

However, there are some major concerns regarding SUI’s tokenomics. The Founder of CyberCapital Justin Bons criticized SUI by noting its centralized control of the supply. More specifically, over 84% of the staked supply is held by the founders.

Additionally, there was no public sale at all. Rather, 100% of the supply was pre-mined, an example of greedy distribution tactics, since a large percentage of the distribution has gone to the founders.

Additionally, Bons raised issue with the unallocated token supply held by custodians, suggesting that there is no transparency on who owns and controls these tokens, making it risky for investors in case they decide to sell.

SUI Returns to Long-Term Support

The SUI price has increased alongside a long-term ascending support trend line since October 2023. The upward movement led to a new all-time high price of $2.18 on March 27, 2024. However, the price has fallen since, returning to the support trend line on April 13 (green icon).

After a bounce that failed to reclaim the $1.40 horizontal resistance area (red icon), the price returned to the support trend line again. So far, the trend line has existed for 197 days.

SUI Price Ascending Support
SUI/USDT Daily Chart | Credit: TradingView

Technical indicators give mixed readings. In the bearish side, both the RSI and MACD are falling. Also, the RSI is below 50 and the MACD is negative. However, both have nearly generated bullish divergences, a sign associated with bottoms.

SUI Price Prediction: Bounce or Breakdown?

The most likely SUI price wave count shows a completed five-wave upward movement between October 2023 and February 2024 (white). If the count is accurate, SUI has also completed an irregular flat A-B-C corrective structure (black) that led to the aforementioned April 13 low. In it, waves A:C have a 1:1.61 ratio, the second most common in such corrections.

Even though SUI reached its all-time high in April, the fact that the upward movement (highlighted) is a three-wave structure suggests it is part of the correction.

SUI Price Wave Count
SUI/USDT Daily Chart | Credit: TradingView

A breakout and daily close above $1.40 will confirm this is the correct count and likely lead to a new all-time high.

However, the wave count rests on the price not breakdown from the ascending support trend line. If it does, not only will SUI likely fall to $0.90, but it could mean the price is still mired in a longer-term correction.

SUI Faces Make-or-Break Level

To conclude, there is uncertainty regarding the SUI price movement. If the price bounces at the current support trend line, it could catalyze a long-term upward movement. However, a breakdown will put the bullish count at risk.

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