In recent days, the token Sui (SUI) has encountered mounting pressure, and the outlook appears increasingly cautious. After losing roughly 14 % of its value since the beginning of the month, SUI remains locked around the US$2 mark, with analysts warning that another ~15 % drop is possible if current trends persist.
Key Drivers of the Weakness
1. Sharp Decline in Staking Activity
A major red flag has emerged in staking metrics. Over a 24‑hour span, the total value locked (TVL) in Sui’s ecosystem dropped by 4.76 %, sliding down to approximately US$1.6 billion. This pull‑back suggests investors are reducing their exposure to higher‑risk assets, reflecting a broader de‑risking trend in crypto markets. The drop in staking signals weakening confidence in the project’s ecosystem, and that in turn could intensify sell pressure as fewer tokens remain locked up and available for speculative yield‑seeking.
2. Derivatives Activity and Sentiment
On the derivatives front, there are some mixed signals. The funding rate for SUI contracts rose from 0.0002 % to 0.0070 % on a recent Monday. This uptick suggests that a segment of traders remains bullish, perhaps viewing the current price as an accumulation zone. However, bullish funding alone may not offset the broader downward momentum created by diminished staking and negative technicals.
3. Technical Analysis: Risk of Further Downside
From a chart‑perspective, the risk of further decline is very much alive. According to technical indicators:
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The MACD has given a sell signal, recommending caution or reduced exposure.
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The RSI currently hovers around 29 on the daily timeframe — a historically oversold area, which can hint at a possible rebound, but not necessarily guarantee one.
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The price of SUI remains well below the key exponential moving averages: the EMA 50 at US$2.82, EMA 100 at US$3.06 and EMA 200 near US$3.15.
If the US$2 support level fails, SUI could drop toward a tested region around US$1.70 — representing a potential further decline of up to 17 %.
Implications & What to Watch
The interplay of ecosystem health (via staking/TVL) and investor sentiment‑driven risk appetite is a potent mix. In this case, both are leaning negative. Here’s what to keep an eye on:
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Continued outflows from staking: If TVL keeps shrinking, it’s a sign the broader ecosystem has lost some investor backing — and that may erode the long‑term growth story.
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Support break: US$2 is a key short‑term support. A decisive break below could trigger stop‑loss cascades, elevated selling, and more technical damage.
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Derivatives and funding dynamics: While the higher funding rate shows some residual bullish interest, one must ask how sustainable it is in a broader negative trend.
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Macro crypto sentiment: The weak behaviour of SUI reflects a wider risk‑off mood in altcoins — if the broader crypto market stays weak, SUI may struggle to find a bounce.
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Upside potential: On the flip side, if SUI were to stabilise its staking numbers, hold above US$2 and trigger a bullish technical signal (say a reversal in MACD or breaking above short‑term EMAs), then there could be a base forming. But at present, the odds tilt toward further downward pressure.
Conclusion
In summary, the token SUI is facing a fragile moment. The drop in staking activity signals weakened confidence in its ecosystem, and the technical picture supports the view that further losses are possible. While some traders remain hopeful (as reflected in derivatives metrics), the risk‑reward profile currently favours caution — especially for those holding significant exposure. The next few days will likely be critical: either the US$2 support holds and SUI stabilises, or it breaks and the next leg of decline toward US$1.70 may play out.
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