SUI Coin Threatens Whale Position: At Risk of $20 Million Loan Liquidation
SUI coin continues to trade just below liquidation levels, putting a major whale’s $20 million leveraged long position in jeopardy. With SUI having fallen significantly from its all-time high, the whale’s position is at risk, which could lead to further value losses. Here are all the details…
SUI Coin Whale’s Position in Danger
A whale’s leveraged position on SUI is at risk of liquidation if the asset price drops to $4.56. The whale is currently overdrawn and has been issued a warning because it is very close to the liquidation threshold. The whale deposited SUI and sSUI tokens into two separate pools to borrow USDC and wUSDT. As of Jan. 8, SUI was trading mostly around $4.60, with occasional dips lower. During this period, the crypto market has generally moved sideways, with Bitcoin (BTC) and Ethereum (ETH) moving lower, increasing the volatility of other crypto assets.
The Rise of SUI and the Increasing Position of Whales
SUI hit an all-time high of $5.33 in recent months, prompting many whales to increase their positions. The SUI chain has been one of the most active throughout 2023 and has begun to attract new traders. In the last quarter of 2024, SUI gained value along with the overall market rally. With this increased value, SUI’s Layer-1 (L1) chain has a thriving DeFi ecosystem. The whale’s position is based on the loan it receives through SUI Lend, and its success depends on the continued positive price performance.
Whale Position Details and Risk
The whale has invested 4.1 million SUI (approximately $19.3 million) to borrow $14.4 million worth of stablecoins. If this loan is liquidated, the whale will continue to hold its stablecoins while the SUILend platform will be the collateral provider for the loan. This means the whale will not suffer a total loss because the loan is traded in a specific DeFi pool, not like a centralized long position. Furthermore, since the tokens are only used in DeFi applications, it is anticipated that price pressure will be lower.
SUI has slowed its recent rise, with open interest falling from its peak of $800 million to $676 million. However, 70% long positions suggest the asset still has potential to expand. Some say that with the liquidation of these long positions, SUI’s price could shrink even further. While the $20 million whale position is at risk, SUILend’s central role in the ecosystem shows that the chain is strengthening DeFi liquidity.
SUI and Its Role in the DeFi Ecosystem
SUI currently has over $1.91 billion in total value locked (TVL), and SUILend has emerged as one of the largest DeFi applications in the past few months. Previously, the SUI ecosystem relied on the NAVI Protocol for most of its DeFi activities; however, recently, SUI’s positive market performance has allowed the lending space to grow. The value locked in SUI has surpassed $2 billion as of the first days of 2024. Additionally, SUI has been carrying over $414 million worth of stablecoins since the beginning of the year, allowing DeFi users to increase their lending and stablecoin positions.
As a result, SUI’s central role in the DeFi ecosystem is strengthening, which increases the chain’s capacity to provide liquidity while also pushing the whale’s position to a critical level.
