Sui Price News: SUI Risks Falling Another 20% After Losing Key Support

Sui (SUI) has gone down by nearly 12% in the past 24 hours to $2.25, as the crypto market started to tank after the head of the U.S. Federal Reserve said he is not certain that the central bank will cut rates again in December.

Upon announcing an expected 25 basis points cut, Chairman Jerome Powell said: “A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it.”

It was the market’s baseline expectation that the Fed would lower rates by another 25 basis points in December. However, this view has shifted, as indicated by data from the CME Group’s FedWatch survey.

December Rate Cut Probabilities – Source: FedWatch

Analysts previously gave this cut a 91% probability, but now only 73% of the respondents believe that it will happen.

Whenever the macroeconomic outlook changes, the market corrects itself as analysts revisit their projections for all asset classes, and this is what’s happening today.

Long Liquidations Spike and Sui’s On-Chain Metrics Disappoint

The price of most altcoins, not just Sui, is dropping sharply, and crypto long liquidations have spiked to $1.1 billion in the past 24 hours alone as a result. Traders have once again been wiped out by a ‘sell the news’ moment, bringing bad memories from the catastrophic October 10 flash crash.

Sui’s Daily Active Users – Source: Artemis

On-chain data shows that Sui’s network activity has been on a downtrend since July. Daily active users (DAUs) plummeted from 1.7 million back then to as few as 400,000 at some point, and then recovered to 1.2 million at the time of writing.

Meanwhile, stablecoin balances have shrunk by around 17% lately, moving from $1.2 billion to $1 billion. Interest in the Sui ecosystem temporarily improved amid the successful launch of Momentum.

However, this protocol’s total value locked (TVL) has been dropping like a rock from $633 million on October 25 to $321 million right now, as per data from DeFi Llama.

This lack of ecosystem growth seems to be what has prevented the SUI token to climb to a new all-time high during this cycle, similarly to what’s happening to Solana (SOL). Although these networks are faster, more scalable, and cheaper than Ethereum (ETH), their on-chain metrics have been disappointing lately.

SUI Has Moved Below a Key Support Today

Looking at the daily chart, SUI has failed to recover from the hit it took during the October 10 flash crash. The token broke its trend line support and successfully retested from below a few days after, and then went on to drop even further.

SUI/USD Daily Chart (Coinbase) – Source: TradingView

Today’s price action seems to be aiming for a retest of those low levels of around $2 for SUI. Trading volumes have spiked by 60% to $1.5 billion, currently accounting for 19% of SUI’s circulating market cap.

Today’s break below $2.3 is risking a much deeper correction, even worse than the October 10 crash, to around $1.75. This implies a big downside risk of over 20% for SUI in the near term, and momentum indicators confirm it.

The Relative Strength Index (RSI) just moved below the 14-day moving average, which indicates that negative momentum is accelerating. Moreover, the price is standing 30% below the 200-day exponential moving average (EMA), also a sign that the long-term trend is bearish.

Overall, Sui’s lackluster on-chain metrics and this bearish breakout are flashing some worrying warning signals for traders.