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Massive release of 44 million SUI units hits market: Two potential directions for price movement

Pressure mounts on SUI following a token unlock of 44 million, as weak backing and bearish indicators suggest a potential fall below $3.

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Pressure mounts on SUI as token unlock releases 44 million tokens, with a lack of strong support...
Pressure mounts on SUI as token unlock releases 44 million tokens, with a lack of strong support and bearish dominance suggesting a potential fall below $3.

Massive release of 44 million SUI units hits market: Two potential directions for price movement

Let's Dig into SUI's Dynamic Dilemma

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Say hello to June, and with it, the release of 44 million SUI tokens (roughly 2% of the total supply) into the market! But here's the catch - the timing's a bit rough, and the market's response is far from encouraging.

If you've been keeping a close eye on SUI, you'll know it peaked at a whopping $4.15 in early May... only to slide nearly 21% since then. Even the mighty BTC couldn't propel SUI upwards during this bull run.

Every attempt the bulls have made to establish a solid support base has been met with a firm slap from the bears. It's clear that the bears are now calling the shots.

Source: TradingView (SUI/USDT)

But let's not forget about this fresh supply - it has the potential to bring about either a juicy short squeeze or a deeper retracement. If buyers show up in droves, the shorts could be left with their pants down. On the flip side, if demand dries up, sub-$3 is looking likely.

A Growing Split Among SUI Holders

According to data from CryptoQuant, SUI's 90-day Spot Taker CVD just flipped green for the first time since the infamous "Trump Pump" from last year. This surge is the same one that catapulted SUI to its ATH of $5.36 back in January.

But here's the twist - since the 22nd of May, SUI's Futures Taker CVD has stubbornly remained red, indicating persistent selling pressure and shorts betting on further downside.

This divergence sets up a classic bullish scenario: Spot buyers are accumulating while futures shorts are piling in, creating the ideal conditions for a short squeeze. Notably, the recent token unlock seems to have established a solid bid support.

If demand holds steady, SUI could soon test resistance near $3.50, paving the way for a push towards $4 in the near future.

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Overview: The recent unlocking of 44 million SUI tokens (approximately 2% of the total supply) has added an extra layer of complexity to SUI's market dynamics. Here's a breakdown of the market's response and potential outcomes for SUI's price:

Market Response

  1. Market Complexity: This token unlock has introduced potential for either fresh selling as holders take profits or accumulation if demand is strong enough to absorb the new supply[2][4].
  2. Price Movement: SUI's price peaked at $4.15 in early May but has since plummeted nearly 21%. Despite BTC's impressive performance, SUI failed to recover, suggesting a weakening market sentiment[2][4].
  3. Bullish and Bearish Forces: The critical question is whether buyers can absorb the additional supply, pushing prices higher, or if selling pressure will prevail, potentially compressing support levels below $3[2][4].

Potential Outcomes

  1. Short Squeeze: If demand surges, this could force short sellers into a panic, leading to a sharp short squeeze and a potential rise in prices. The Chaikin Money Flow (CMF) above the zero signal line speaks to potential positive momentum if sustained[3][4].
  2. Price Correction: In contrast, a lack of demand could result in a deeper price correction. This correction could push SUI below the $3 mark, a level that has shown some vulnerability as support[2][4].
  3. Bullish Rally: Historically, after an initial period of volatility following token unlocks, SUI has experienced price rallies. If this trend persists, SUI may see a notable uptick in June, potentially reaching $4.30 or even retesting $5 in bullish market conditions[3].
  4. In the wake of the 44 million SUI tokens being released into the market, the potential for a short squeeze or deeper retracement exists, hinging on the reaction of buyers and sellers.
  5. The current market sentiment towards SUI is far from positive, with the token's price plummeting nearly 21% since its peak at $4.15 in early May, even amidst BTC's bull run.
  6. Despite the bearish market, the recent token unlock has also established a potential solid bid support for SUI, raising the possibility of a bullish rally if demand holds steady.
  7. Amidst the ongoing bearish trend, both spot and futures markets for SUI show a divide, with spot buyers accumulating and futures shorts piling in, potentially setting the stage for a classic short squeeze scenario.

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