Explore the impact when 34.62M SUI tokens will be unlocked on November 3 & its impact on $SUI price.
Sui is preparing for a significant event with the unlocking of tokens worth $15.88 million (34.62M $SUI). These events, while generating excitement in the crypto community, can also trigger a decline in the token's price due to the increased selling pressure. With 4% of the circulating supply about to enter the market this week, the SUI community is bracing for potential shifts in the market.
The Scheduled Token Unlock
According to data from token.unlocks.app, $SUI token is scheduled for an unlock on November 3. This unlocking will make 34.62 million tokens worth $15.88 million available, with 4% of the circulating supply earmarked for the community access program. Additionally, an allocation of 900,000 tokens is designated for a linear unlock over 26 days.
The increasing number of tokens in circulation often leads to intensified selling pressure, posing challenges to maintaining the current price trend. Despite a recent upward climb of 7.92% over the past week, the unlocking event is expected to herald a potential reversal of this trend in the short term.
Examining the Fundamentals
While the upcoming token unlock may raise concerns about short-term market trends, the fundamental indicators suggest a more optimistic long-term outlook. Notably, Sui Network has shared encouraging statistics in a recent tweet, highlighting its average daily volume and Total Value Locked (TVL).
The TVL of Sui has experienced a consistent upward trajectory over the past month, hitting a significant milestone of $70.29 million. This growth indicates a noticeable increase in the token's popularity among market participants. Another fundamental milestone is the integration of Sui into the Atomic Wallet ecosystem, which now grants access to over 5 million users. This development reflects the promising expansion of this Layer 1 blockchain protocol.
Technical Analysis and Market Outlook
Despite the positive fundamentals, the technical analysis presents a more cautious perspective, hinting at potential downward pressure on the $SUI token's price. Currently valued at $0.4538 on Binance, $SUI has recently achieved nearly 8% gains, yet the likelihood of a pullback looms on the horizon.
Analyzing the one-day price chart of SUI/USDT, we observe that SUI's price is positioned above its two long-term Exponential Moving Averages (EMAs), with the 10-day at $0.4422 and the 50-day at $0.4487. The Fair Value Gap (FVG) in the range of $0.5531 to $0.5727 acts as a resistance point for SUI's price, suggesting potential hurdles in the immediate future.
In case the price manages to breach the resistance and fill the gap, a further decline becomes a possibility. However, the 10-day and 50-day EMAs at $0.4422 and $0.4487 are likely to provide some support. Additionally, the Fibonacci Retracement analysis indicates that a potential correction might find support at the $0.4171 level if the price breaks down the support provided by the EMAs.
In conclusion, the impending token unlock event for SUI will impact both short-term trends and long-term prospects. Despite potential challenges posed by increased selling pressure, the robust fundamental indicators suggest a positive trajectory for SUI's future growth. However, market participants should remain attentive to the technical indicators and brace themselves for potential fluctuations in SUI's price in the coming weeks.
Note: The information presented in this article is for educational and informational purposes only and should not be construed as financial advice. Readers are encouraged to conduct their own research and consult with financial advisors before making any investment decisions.
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