SUI has recently seen a 12% rise in the past 24 hours, bringing back some investor confidence. However, this price increase could prove disastrous for traders, as it may trigger significant liquidations if the altcoin reaches a key price level.Â
The recent rally is a double-edged sword with potential consequences for short traders.
SUI Traders Face Losses
According to liquidation data, SUI faces a potential $96 million worth of liquidations if its price hits $3.48. This would primarily impact short traders, who have positioned themselves for a price decline.
Should SUI rise towards this critical level, short contracts would be liquidated, forcing traders to cover their positions and further propelling the price increase.
This potential liquidation event highlights the volatility of SUI and the risks involved for traders who are betting against it. With a surge in price, short traders might be forced to exit their positions, inadvertently fueling the uptrend.
As a result, this scenario could exacerbate the price rally, putting both short and long traders at the mercy of unpredictable price movements.
Despite the recent 12% rise, the Chaikin Money Flow (CMF) indicates a decline, signaling a lack of investment inflows. The CMF is currently showing negative momentum, suggesting that investors are not fully backing SUI’s price rise.
The recent gains appear to be driven more by short covering rather than a broad-based surge in buying interest.
Should the outflows continue, SUI’s price could face additional pressure. The lack of strong buying support, coupled with the decline in CMF, suggests that the recent rally may not be sustainable.
If these outflows persist, they could lead to a price reversal, diminishing the optimism generated by the recent gains.
SUI Price Attempts Surge
At the time of writing, SUI is trading at $3.27, having risen by 12% in the last 24 hours. The price is currently facing resistance at $3.33, which has proven to be a significant barrier in the past.
Given the ongoing outflows, it seems unlikely that SUI will break through this resistance level in the near term.
If SUI fails to breach the $3.33 resistance, it could retrace to lower levels, such as $3.13 or $2.91, wiping out the recent gains. This would mark a continuation of the consolidation phase, as the lack of strong buying pressure prevents further upward movement.
However, the Parabolic SAR indicator is approaching a key level, with a potential flip below the candlesticks that could signal the start of an uptrend.
If SUI successfully breaks through $3.33, the price could rise to $3.48. A breach of this level would invalidate the bearish outlook, triggering a wave of liquidations on short positions and further boosting the price.
Disclaimer
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