SUI price tanks after hitting a six-month high amid market volatility

SUI fell sharply on October 4, falling over 15% to become the biggest loser of the day.

According to Crypto.news data, Sui (SUI) fell from its intraday high of $1.97 to $1.62 on October 3; The market value decreased from 5.46 billion dollars to 4.45 billion dollars. At press time, the token has recovered slightly, trading at $1.78, still down 4% in the last 24 hours and with a market cap of $4.92 billion.

Token unlocking and market volatility

SUI’s price action coincided with the unlocking of 64.2 million tokens on October 1, representing 2.4% of the circulating supply. Token unlocks can often trigger volatility as early investors or team members sell tokens to make a profit.

However, despite the massive opening, SUI’s price correction has remained relatively limited, likely due to the market’s optimistic outlook on the token, which rose 115% in September.

The limited impact of unlocking reflects confidence in the long-term potential of SUI; Investors apparently don’t want to part with their holdings. This sentiment is supported by rapid growth and increasing utility in the SUI ecosystem.

Snow rotation speculations to Aptos

Amid the price correction, some analysts suggested that traders may have shifted profits from SUI to its close rival Aptos (APT). Both SUI and Aptos are positioned as high-performance layer 1 blockchains, and such rotations between assets are common in the crypto market as investors seek to maximize short-term gains.

Despite recent volatility, SUI’s core ecosystem continues to expand rapidly, driven by increased developer and user interest.

Data from DefiLlama shows that the total value locked in the SUI ecosystem increased from $383 million in August to $1 billion. This growth has seen SUI surpass more established blockchains such as Polygon and Avalanche in the TVL rankings.

There are several factors supporting SUI’s recent growth. Grayscale’s launch of SUI Trust in September added significant momentum, opening the door for accredited investors to gain exposure to the token.

At the same time, SUI’s strategic dive into the world of blockchain gaming has attracted attention; Mysten Labs has partnered with Playtron to launch pre-orders for the SuiPlay0X1 console, a web3 native gaming device. Meanwhile, Circle, the company behind USDC, announced plans to increase the potential for decentralized finance applications by bringing the stablecoin to the SUI blockchain.

Sui’s latest partnership with Atoma brings decentralized AI to its network, leveraging Sui’s consensus and low transaction fees. The integration allows applications on Sui to combine open-source AI models with verifiability guarantees, supporting use cases such as code generation, AI-powered, non-fungible tokens, and automation in decentralized finance.

These collaborations seem to have brought the token into the limelight; SUI has been the most searched search term on Google since the beginning of October.

SUI shows signs of improvement

From a technical perspective, SUI appears to be regaining its bullish momentum. On the daily chart, SUI is positioned above the middle Bollinger Band at $1.55, indicating a potential bullish trend, while the Relative Strength Index is approaching the overbought level.

sui price, Bollinger Bands and RSI chart – October 4 | Source: crypto.news

The Average Directional Index, an important metric for assessing trend strength, rose to 54; This is well above the 25 threshold, which signals a strong trend. Additionally, the Moving Average Convergence Divergence indicator shows bullish momentum and the two lines are in an uptrend.

SUI ADX and MACD chart – October 4 | Source: crypto.news

These indicators suggest that SUI may continue its recovery and the $2 level may act as the next key resistance level. If the bullish momentum continues, the token could target a new all-time high of $2.17, which would represent a 19% gain from current levels.