SUI price has experienced a remarkable increase of over 400% this year, driven by the rapid growth of its ecosystem. However, recent data indicates a concerning trend as the DeFi TVL—total value locked—in Sui’s protocols has plummeted to its lowest point since April when measured in $SUI terms. This downward trajectory is raising alarms for investors: Is a crash in the SUI price imminent?
Currently, SUI price hovers around $4.56, just shy of its all-time high of $4.9. The surge can largely be attributed to the rising assets within its DeFi protocols, which have now amassed over $1.7 billion. This impressive figure positions Sui as the ninth-largest blockchain, surpassing well-known competitors like Avalanche, Aptos, and Polygon.
Yet, it’s essential to acknowledge that the inflow of assets into DeFi is largely a byproduct of SUI’s own price increase. Recently, the TVL reported a worrisome downtrend, dropping from $730 million in SUI terms back in September to a mere $385 million today. Such a decline implies that the health of Sui’s DeFi protocols may be faltering, which could negatively impact the token’s price.
Compounding these issues is the drop in the number of core developers and commits, both critical indicators of network activity. Data shows that, in December, the number of developer commits has fallen to 950, down from a staggering 5.3k peak back in May last year and just 2.93k in January. At the same time, the count of core developers has declined from a high of 86 to just 44.
Despite these challenges, there are bright spots worth mentioning. The overall volume of stablecoins on the Sui chain has risen to over $377 million, and several DEX protocols—including Cetus, Bluefin, Kriya, and DeepBook—are witnessing solid trading activity.
From a technical viewpoint, the daily chart reveals that SUI has been in a strong uptrend, remaining above all critical moving averages. Nevertheless, it’s starting to manifest a rising wedge pattern, a typical precursor to bearish movements. This pattern occurs when an asset forms two upward-trending and converging lines, with bearish breakouts often happening near the tip.
Another red flag is its proximity to the Murrey Math Lines’ extreme oversold levels, which typically triggers a pullback. Currently, SUI remains significantly above its 50-day moving average, hinting that a correction might be in the cards. Should the price break downwards, it could potentially fall to a significant support and resistance pivot point of approximately $3.125, representing a 30% decline from its current price. Conversely, if SUI can break above its year-to-date high of $4.96, it could invalidate the bearish signals and set the stage for further gains, possibly reaching $6.
Here are some common questions related to this topic:
- Can the falling SUI TVL lead to a price crash?
While there isn’t a clear correlation between DeFi TVL and a coin’s price, the drop signifies a potential loss of momentum for SUI. - How low can SUI price fall?
If it breaks below the lower edge of the rising wedge pattern, a descent to around $3.12 could occur. - Is SUI a viable rival to Solana?
Many analysts consider SUI a strong competitor to Solana, citing its faster transaction speeds and lower costs, making it increasingly attractive to DeFi and gaming developers.
The unfolding events surrounding SUI price and its DeFi TVL are crucial for investors to monitor. The decline in protocol health and developer activity raises legitimate concerns, but not all hope is lost. Keeping a finger on the pulse of these developments could help investors navigate the future of SUI.
