fxstreet.com
- Sui extends the downfall on Monday after closing in the red for the third consecutive week.
- The technical outlook reveals a triangle pattern holding the fate of Sui.
- Sui unlocked 58.35 million tokens, worth $194 million, on Sunday, signaling an increased supply.
Sui ($SUI) is down over 1.50% at press time on Monday after three consecutive weekly closings on a bearish note. As Sui survives the 58.35 million tokens unlocked on Sunday, avoiding a panic sell-off, a potential fallout from a triangle pattern could extend the losses to $2.71.
Sui price holds above $3 within a triangle pattern
Sui trades at $3.30 at the time of writing on Monday, projecting a weak start to the week with an intraday pullback. However, the nearly 5% rise over the weekend helps Sui bounce back from a rising support trendline formed by the lows of April 7 and April 20.
The price action also lights a sloping resistance trendline with lower highs on January 4, May 10, and May 22. With the converging trendline, Sui's daily price chart develops a symmetrical triangle pattern.
Despite the short-term surge on weekends, the altcoin is down by 16% over the last three weeks as it reverses south within the triangle pattern. Holding above the lower trendline, Sui takes an early reversal from the 200-day Exponential Moving Average (EMA) at $3.04 and resurfaces above the 100-day EMA at $3.22.
With bulls holding grounds near the $3 mark, the minor recovery pushes the Moving Average Convergence/Divergence (MACD) line closer to its signal line, hinting at a bullish crossover. A potential crossover will help the indicator lines sustain in the positive territory and stage a revival in bullish momentum.
If the prevailing downfall continues, a clean push in Sui closing below the 100-day EMA at $3.22 could result in the triangle pattern's fallout. In such a case, the 200-day EMA at $3.00 acts as the immediate support, followed by $2.71, the 23.6% Fibonacci retracement level from $5.29 on January 4 to $1.92 on April 7.
$SUI/USDT daily price chart. Source: Tradingview
On the other hand, Sui could face headwinds at the $3.60 resistance, aligning with the 50% Fibonacci retracement level if it continues its bullish cycle within the pattern. A potential cloning above that level could challenge the resistance trendline near $3.80.
Upcoming token unlocks warn of excessive supply
On Sunday, the Sui Foundation unlocked 58.35 million $SUI tokens worth $194.09 million, liquidating the market with 0.58% of the maximum $SUI supply. The recent unlock is part of a linear unlock process, which has been releasing more $SUI supply over the preceding months. On July 1, the upcoming unlock will release another batch of 58.35 million tokens, followed by monthly unlocks of 56.91 million $SUI till October 1.
$SUI Unlock History. Source: Cryptorank
Currently, Sui holds a circulating supply of 3.396 billion $SUI or 33.96%of the maximum 10 billion supply. With the incoming unlocks, Sui could crumble under excessive supply, leading to potentially steeper corrections.