SUI, the native coin of the Sui Network blockchain, has been performing strongly recently. It is currently trading at $1.92, recording a price growth of 115% in the past month.

However, this dramatic price increase has occurred at the same time as growing interest in short positions, suggesting that many traders remain skeptical about its long-term prospects.

Sui futures traders not impressed

SUI has seen an increase in demand for short positions since early October, as evidenced by its negative funding rate, which stands at -0.0012% at the time of writing.

Financing rates are periodic charges to ensure that an asset’s contract price remains close to its spot price. A negative rate indicates that traders are paying to keep short positions open, signaling a bearish outlook.

Read more: What is Sui Blockchain? A Beginner's Guide

When funding rates are negative during a price rally, short sellers are dominant and are willing to pay to maintain their short positions despite the price rise.

This bearish outlook is further compounded by SUI’s rising open interest, which currently stands at $810 million — the highest level since December 2023.

SUI Funding RateSUI financing rate. Source: Coinglass

Rising open interest usually indicates that new positions are being opened, signaling growing interest or market participation. However, when negative funding rates accompany this, a significant number of the newly opened positions are sold.

This suggests that market sentiment remains bearish as more participants are willing to bet against the price rising.

sui open interestOpen interest from SUI. Source: Santiment

Price forecast

Despite strong demand for short positions, SUI’s price has continued to rise. If its funding rate remains negative while its value increases, a short squeeze could occur.

In this scenario, short sellers may be forced to close their positions by buying back the asset, which could further boost the price. Should this happen, SUI could potentially reclaim its all-time high of $2.18, a level it last reached on March 27.

sui price predictionSui Price Analysis. Source: TradingView

However, if demand for SUI drops and it undergoes a correction, its price could decline to $1.81. If selling pressure gains momentum, this decline could extend to $1.52.

The article Even with significant growth, traders are not impressed by SUI; understand was first seen on BeInCrypto Brazil.