Sui Network (SUI) has attracted a lot of attention with its recent price surge, driven by continued demand. However, the relative strength index (RSI) on multiple time frames shows "overbought" conditions, accompanied by bearish divergences, and market sentiment is gradually shifting from bullish to concerns about a potential pullback.
Overbought signal sounds, is it time for whales to cash out?
SUI has gained 184% since the beginning of the year, including a staggering 118% in the past 30 days. However, with SUI showing overbought RSI on all timeframes except the 15-minute chart, it looks like whales and early investors are facing a perfect time to take profits.
According to CoinGlass data, SUI is currently the only cryptocurrency that is overbought on the weekly chart. SUI's RSI is above 70 on the 1-hour, 4-hour, 12-hour, 24-hour and 1-week time frames, indicating that the market is overbought and correction pressure is evident.
Technical analysis signaling a bearish reversal?
Data from TradingView shows that the daily RSI of SUI reached 72.07 and retreated to $2.21 after reaching an all-time high of $2.29. In addition, the chart since September 24 shows that the SUI price has made three higher highs, while the RSI has made three consecutive lower highs, forming a typical bearish divergence. This divergence is usually a precursor to a price reversal, especially after a strong rise.
According to the Elliott Wave Theory, the famous trader Pejman Zwin predicts that SUI may rise about 20% near the resistance line, but will then face a -20% to -40% adjustment. Currently, SUI has reached the target price of $2.30. If the prediction comes true, a correction may be imminent.
Fundamentals support long-term bullishness, short-term risks increase
Despite the intensified short-term pullback pressure, Sui Network is still attracting attention with its strong technology stack and wide user adoption. The participation of Circle and Grayscale further enhances SUI's market position. However, SUI's token economics has aroused widespread concerns, especially the fact that only 30% of the circulation and up to $100 million of unlocked tokens per month may lead to strong selling pressure.
Summary: Short-term risks of SUI
While Sui’s technical strength provides a solid foundation for the long-term outlook, the current overbought conditions, bearish divergence, and token unlocking pressure suggest that prices may pull back in the short term. For investors, now may be a prudent time to consider profit-taking.
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