After a steep drop, the cost of Sui tokens has rebounded alongside other digital currencies, following the Federal Reserve’s hawkish decision on interest rates. This year, Sui has been one of the top-performing cryptocurrencies, with an impressive 440% increase. Some speculate that the decline in the total value locked (TVL) within its DeFi platforms and the number of developer commitments could lead to a potential crash for the Sui token price.
SUI Price At Risk of Crash As DeFi TVL Sinks
On Wednesday, Sui’s price stands at approximately $4.56, just shy of its record high of $4.90. One contributing factor to its upward trend is an increase in the value of assets within its DeFi protocols, which now exceed $1.7 billion. This expansion has catapulted Sui into the top 10 largest blockchains in the market, surpassing other well-known chains such as Avalanche, Aptos, and Polygon.
Despite the significant growth in Decentralized Finance (DeFi) assets, this increase primarily stems from the escalating price surge of Sui. Consequently, the volume of its assets has seen a boost. However, since reaching its peak in September, the Total Value Locked (TVL) has been on a downward trend when measured in Sui terms. It has dropped from 730 million SUI to its current level of 385 million, which is its lowest point since April. This decline suggests that the DeFi protocols associated with Sui might not be performing optimally, potentially impacting its price over time.
SUI Network Commits And Core Developers Falling
Another possible concern for the SUI price is the decrease in the number of developer contributions. These contributions represent modifications made by developers within the network. Essentially, an increase in these contributions suggests higher network activity.
The data indicates that the number of commits in December is currently 950, which is lower than the peak of 5,300 in May last year. It had previously peaked at 2,930 in January this year, and the trend has not been particularly positive. Additionally, the number of core developers has decreased from a high of 86 so far this year to just 44 now.
On the flip side, Sui is exhibiting some encouraging underlying factors as well. For instance, the value of stablecoins on its blockchain has surpassed $377 million. Furthermore, its DEX protocols such as Cetus, Bluefin, Kriya, and DeepBook are experiencing substantial activity.
SUI Technical Analysis As Rising Wedge Forms
The daily graph indicates that the SUI token’s price is on an upward trajectory, and based on trend-following strategies, it seems probable that this bullish trend will persist for some time because it consistently surpasses all moving averages.
On the contrary, certain concerns have arisen that may necessitate a possible reversal. The chart appears to be forming a rising wedge pattern, which is often interpreted as a bearish signal. This pattern emerges when an asset displays two ascending and converging trendlines. If these lines approach their tip, it signals a potential downward breakout.
Another potential issue is approaching an overextended level on Murray’s Trend Lines, often leading to asset pullbacks. Additionally, it currently hovers well above its 50-day moving average, suggesting a possible reversal to more average values.
If a significant drop occurs, it might take us to the crucial turning point for S&R (Sell & Reserve) around $3.125. This price point represents approximately a 30% decrease from our current position.
Conversely, if the Sui price surpasses its current year-to-date high of $4.96, it would contradict the bearish perspective and suggest potential increases toward $6 instead.
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2024-12-19 15:30