Could the SUI TVL decline be a precursor to a pullback?
SUI price rise draws analyst interest
SUI prices just ended the week with some downside as profit taking intensified on Saturday.
This comes a day after prices reached an all-time high, suggesting this could be the start of a bearish trend.
There are several reasons why there is a sharp pullback in the SUI at the time of writing. The first is a bearish divergence forming between price and the RSI.
The SUI price peaked at $4.92 on Friday as expectations mounted that the cryptocurrency would rally towards the $5 price tag.
However, in the first week of December, the RSI of this new ATH was significantly lower than that of previous ATHs.
SUI Price Trend / Source: TradingView
Bearish divergence typically signals greater selling pressure. The likelihood of this outcome is usually higher, especially when prices emerge from a rebound that drove price discovery.
As expected, there has been a $12 million outflow of Sui spot in the past 24 hours. This marks a sudden shift compared to the $16 million inflow recorded on Friday. This sharp change in investor sentiment aligns with a 6.18% drop on Saturday.
SUI Spot Flow / Source: Coinglass
Sentiment in the derivatives sector has also turned bearish after recent peaks. The negative funding rate recorded on Saturday proves this. Most of the short selling was observed on Crypto.com.
Will the drop in SUI TVL be a precursor to a pullback?
Positive TVL growth is almost always accompanied by bullish price trends. Sui TVL may have reached a new high of $1.91 billion in dollar value. However, its SUI coin price has been declining since September.
Sui TVL / Source: DeFiLlama
On September 6, the coin value of Sui TVL was $781.66 million, which later fell to $403.91 million. This may indicate that more holders have been withdrawing funds to secure profits.
On the other hand, a drop in TVL may not necessarily be a reliable indicator of impending selling pressure.
In context, the coin value of Sui TVL saw positive growth during April to June. Note that prices were bearish during this period.
The reality is that with the exhaustion of bullish sentiment, there will inevitably be some selling pressure.
However, the extent of the downside may be limited, which could relate to long-term prospects.
The rise in SUI prices has piqued analysts' interest.
Sui crypto is one of the new members in the blockchain space. Its strong growth in such a short time indicates that the market has well accepted this project and its native token.
The positive performance has attracted key figures and influencers, including Raoul Pal, who expressed a positive view on the Sui network, especially regarding its latency.
Pal also emphasized that the Grayscale Sui Trust is a major indicator of institutional interest in the network. This development highlights the fact that Sui bulls may still showcase strong momentum in 2025.
Positive sentiment may limit the downside and raise the floor price of the Sui cryptocurrency. However, this does not eliminate the chance of significant pullbacks occurring in the process.
Meanwhile, with rapid growth in market capitalization, Sui's ranking continues to rise, currently at 16th place. Aggressive growth may bring it closer to the top 10 in the coming months.
