Sun Token’s 240% monthly rally faces headwinds amid a dip in open interest

Sun Token rocketed to the forefront of the top 300 cryptocurrencies with an impressive monthly rally, but a decline in open interest and volume suggests its rise is losing momentum.

Justin Sun’s cryptocurrency Sun Token (SUN) has been one of the top performers, gaining 240% in the past 30 days as investors respond positively to the expansion of the ecosystem.

SUN serves as the utility token for Sun Pump, a meme coin launch platform on the Tron network and is similar to Solana’s Pump.fun memecoin distributor.

Initially launched four years ago as a Bitcoin alternative, SUN Token faced a significant decline in 2021 due to oversupply issues. This led to a shift in focus towards decentralized finance on platforms like Justswap and Justlend. With new use cases, SUN is now targeting a $1 billion market cap.

Sun Token reached a peak of $0.0435 on August 25, its highest value since December 2021, representing an impressive 731% increase from its lowest point in 2023. Its market cap has also seen significant growth, rising from $101 million to over $326 million on August 17.

Justin Sun has played a key role in driving this growth by implementing strategies like leveraging memecoins and adjusting network fees. His latest feature, SunPump, has quickly surpassed Solana-based Pump.fun in terms of daily active users and revenue as of August 21.

Justin Sun recently addressed critics who made negative comments about the SUN token via an X post on his account. He responded to the criticism by offering to purchase any SUN token from these individuals at a rate of $0.03 each.

Traders are optimistic that Sun’s ecosystem could be a key driver of growth, drawing parallels with Solana’s Raydium network, which has seen its own memecoin grow in popularity, becoming one of the top ten decentralized exchanges with billions of transactions per month.

SUN price action

Despite being the highest-earning token in the last 30 days, Sun Token fell by 7.2% in the last 24 hours. The crypto asset’s 24-hour trading volume dropped by 30% to around $127 million.

According to data from Coinglass, SUN’s total open interest has dropped by 17.89% in the past day, from $84.64 million to $69.51 million. This decline reflects waning investor interest as the cryptocurrency market cap has fallen by 2.1%, reaching a total value of $2.11 trillion.

Data from the market intelligence platform also shows that SUN’s total funding rates currently stand at -0.0348%, indicating a bearish sentiment among investors regarding SUN’s price outlook.

SUN price, RSI and ADX – September 2 | Source: crypto.news

The Average Directional Index climbed to 61.05, its highest level since June 6, indicating strong momentum, as does the ADX, which is often signaled above 50.

Meanwhile, the Relative Strength Index has entered the overbought territory. This suggests that SUN may continue to rise in the short term, but a reversal may be on the horizon as investors start taking profits.

The critical level to watch is $0.030; if SUN’s price breaks down to this level, it could present a buying opportunity ahead of a possible recovery. However, if it fails to hold this level, the price could drop to around $0.013. Conversely, if the momentum continues, SUN could rally to $0.050.