TLDR
- SUI is testing descending channel resistance after completing an ABCDE correction
- Key resistance level at $2.89 (0.5 Fibonacci retracement) with support at $2.31
- SUI has gained 5% in the past week despite 32% drop over four weeks
- Technical analysis shows an ascending triangle pattern forming on 1-hour chart
- Sui network fundamentals remain strong with $1.1 billion total value locked
Sui (SUI) is showing signs of a potential trend reversal after completing a major corrective phase. The cryptocurrency, which has been in a downtrend since hitting $5.35 in January, may be ready to break out of its descending channel pattern.
The past several weeks have been challenging for SUI holders. The cryptocurrency has dropped over 32% in the past four weeks alone. This decline came in the wake of market reactions following the second inauguration of U.S. President Donald Trump.
Despite these challenges, SUI has shown resilience in recent days. The token has climbed about 5% over the past week, suggesting a potential shift in market sentiment. This rebound has brought SUI to a critical resistance level that could determine its next major move.
Technical analysis reveals a completed ABCDE correction within a descending wedge pattern. This type of correction often precedes a trend reversal when complete. The 4-hour chart shows that price action has stabilized near the 0.618 Fibonacci retracement level at $2.31.
This $2.31 level serves as a critical support zone for a potential reversal. If SUI can hold above this level, it improves the chances for an upward breakout. The 4-hour Relative Strength Index (RSI) is attempting to recover from oversold conditions.
The recovery in RSI suggests that selling pressure may be waning. This technical indicator often leads price action, making it an important signal for traders watching SUI. A continued rise in RSI would support the case for a bullish reversal.
SUI is currently approaching a key resistance level at $2.89, which aligns with the 0.5 Fibonacci retracement. Breaking above this level would validate the bullish scenario and potentially open the door to higher targets. The next major resistance would then be at $3.47, the 0.382 Fibonacci level.
Zooming into the 1-hour chart, SUI shows early signs of a potential breakout from a local ascending structure. According to analyst Ali Martinez, the price is forming an ascending triangle pattern. This pattern often signals a potential breakout if the price consistently closes above $2.4.
If the price drops below $2.2, it would invalidate the bullish setup. This could trigger a deeper correction toward the $2 level or possibly lower. The critical support at $1.48 (0.786 Fibonacci) would be the last major defense against a more severe downtrend.
Looking at the Elliott Wave count, a five-wave sequence was recently completed at $2.50. This suggests that a corrective (a)-(b)-(c) pullback may occur before a renewed uptrend begins. The price may retrace toward the $2.31 level in the short term, forming a higher low.
If this correction completes near $2.31 and holds, the next impulsive wave could target the $2.89 region. A successful breakout above this level would confirm the bullish reversal scenario. The primary target in this case would be near the previous highs above $5.00.
While price movements remain the main focus in the short term, Sui’s long-term fundamentals continue to improve. The network has been developing a strong Web3 ecosystem with several DeFi protocols including Suilend, NAVI, Cetus AMM, and Haedal.
The total value locked (TVL) in the Sui network currently stands at over $1.1 billion. This is a major achievement that shows growing interest in the ecosystem. The market capitalization of Sui’s stablecoin has reached around $654 million.
Positive outlook
These fundamental factors strengthen Sui’s long-term outlook, even during periods of price volatility. The growth in both DeFi protocols and total value locked provides a solid foundation for future price appreciation.
The next few days will be critical for SUI’s price action. Traders should watch the key levels at $2.31 for support and $2.89 for resistance. A clear break above resistance would confirm the trend reversal, while a drop below support would suggest more downside ahead.
For now, SUI appears poised at a critical juncture, with technical indicators suggesting a potential reversal. If the cryptocurrency can maintain its recent momentum, a significant breakout could be on the horizon.
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