Beware of stablecoin and unlocking risks

The Sui course has declined and moved to a bear market after it has fallen 35% since its high in May. It was traded at $ 2.80, which corresponds to a market capitalization of over $ 9.4 billion.

Sui token activation and stablecoin weakness

The course of the SUI token could continue to fall in the coming days because the network is preparing to unlock millions of tokens.

On May 1st, 5.2 billion tokens worth over $ 156 million will be activated. This activation is part of the planned monthly process, which will continue by 2030 when the offer limit of 10 billion has been reached. SUI has over 3.39 billion tokens in circulation.

A token unlock is often seen as a catalyst for cryptocurrency because it increases the number of coins in circulation. This is often risky, especially if demand is limited.

The SUI course is also at risk because the StableCoin ecosystem shows a certain weakness. Data that of Artemis have been put together, show that the stable coin offer has broken up by 47 % to $ 833 million in the past 30 days.

The number of transactions has also dropped by 60 % to 11.4 million during this period. The number of stablecoin addresses has also dropped by 12% to 256,000.

A decline in the stablecoin transactions and the stable coin offer is a risk of a crypto project, as this is a sign of falling benefits. A possible reason for this is the recent hack of the Cetus protocol that cost millions of dollars.

Technical analysis of the SUI course

The daily diagram shows that the SUI course has crashed in the past few weeks and from a maximum of $ 4.29 in May to $ 2.7. It fell under the 50% fibonacci retracement level at $ 2.9326.

SUI has also formed a mini death cross pattern in which the 50 and 100-day exponential moving average (EMA) have crossed. He also formed a descending channel that connects the lower lows and the lower highs.

The MacD indicator has remained under the zero line. Therefore, the token will probably continue to fall because the sellers target the 61.8%retracement level at $ 2.3. A movement below this level would confirm the downward trend and possibly lead to the important support at $ 1.7168. A movement about the resistance brand at $ 3 indicates further price gains.

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