Sui (SUI), a rising star in the cryptocurrency market, has faced significant challenges in its price action. After initially showing promise, the altcoin now appears to be heading toward a more extended correction, as technical indicators suggest growing bearish momentum.
SUI’s Technical Setup – The Rising Channel Breaks Down
A glance at SUI’s 4-hour chart reveals that the token has been trading within a rising parallel channel since last month. In technical terms, a rising channel forms when prices make higher highs and higher lows, connected by two upward-sloping trendlines. While this pattern often signals a bullish trend, the continuation of this upward momentum depends on the price remaining above the lower trendline, which has served as critical support.
For SUI, this key support line sits at $2.03, and as the token’s price approaches this level, there’s a growing concern that the altcoin might break below it. Should this happen, a sharp decline could follow, potentially signaling the end of the current upward trend and triggering a larger correction.
Bull Bear Power Oscillator Turns Bearish
A deeper look at the same chart timeframe highlights another worrying trend for SUI. The Bull Bear Power (BBP) indicator, which measures the balance of strength between buyers (bulls) and sellers (bears), has turned negative. A negative BBP reading typically signals that sellers are in control, further supporting the bearish case.
In recent days, the BBP has experienced a sharp decline, suggesting that bearish momentum is gaining strength. This development increases the likelihood that SUI’s price could face a steeper decline in the near term.
Bearish Momentum Confirmed by MACD
On the daily chart, the Moving Average Convergence Divergence (MACD) has also entered the negative territory, further confirming the bearish outlook for SUI. The MACD is a momentum indicator that traders use to assess whether a cryptocurrency is gaining or losing strength. When the MACD is positive, it generally signals buying opportunities, as it indicates rising momentum. However, a negative MACD, as is the case with SUI, implies that downward momentum is in play, making it a strong sell signal.
Based on these technical indicators, SUI could see a 10% drop, bringing the price down to $1.83. In a highly bearish market environment, this downward move could extend further, potentially taking the altcoin as low as $1.64.
Despite the mounting bearish signals, there is a slim chance that bullish momentum could re-enter the market and invalidate this bearish outlook. If buyers step in and regain control, SUI’s price could bounce back and retest the upper trendline, potentially pushing the price toward $2.36.
However, without a significant shift in market sentiment, the odds seem to favor an extended correction for SUI.
Also Read: Sui Launches ‘SuiHub Dubai’, Its First Global Hub to Drive Web3 Innovation
While SUI has shown potential in the past, the current technical setup suggests that the altcoin may be heading for further downside. With bearish indicators like the BBP and MACD pointing to a decline, traders should keep an eye on the key support level at $2.03. A break below this level could pave the way for a more pronounced drop, potentially taking SUI as low as $1.64.
Nonetheless, should bulls return, a rebound to $2.36 remains a possibility. For now, caution is advised for those holding or considering an investment in SUI.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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