Will SUI bulls lose steam ahead of $128M token unlock?

Sui is trading at $3.85 at press time after gaining 38% over the past month, but a looming token unlock could threaten gains.

Rising on-chain activity and solid fundamentals have helped sustain Sui’s (SUI) price increase this month. At the time of writing, the network’s total value locked was $2.2 billion, up from $1.7 billion at the beginning of July, according to DefiLlama data.

Similarly, monthly decentralized exchange trading volume nearly doubled, climbing from $8.1 billion in June to $14.3 billion in July. Adoption of stablecoins on Sui is also increasing. The market capitalization of stablecoins recently topped $1 billion, indicating growing trust in the chain’s decentralized finance ecosystem.

SUI token unlock could shift sentiment

Despite this momentum, attention has shifted to the upcoming token unlock. Data from Token Unlocks shows that 44 million SUI tokens, worth roughly $128 million, will be released into circulation on August 1 at midnight UTC. 

This represents about 1.27% of the circulating supply. Currently, only 35% of the total supply is unlocked. While the percentage may seem small, the additional supply could prompt some holders to take profits, especially after the sharp price increase.

A 2% decline in trading volume to $1.54 billion over the last day suggests a slight slowdown in market activity. Open interest decreased 1.3% while futures volume rose 2.2%, as per Coinglass’s derivatives data. This suggests that traders are becoming more cautious in the run-up to the unlock.

SUI technical analysis

SUI appears to be entering a period of consolidation. With a neutral relative strength index of about 54, there is no strong buying or selling pressure. Other momentum indicators like the Stochastic Oscillator and Commodity Channel Index are also in neutral territory, reflecting uncertainty.

SUI is currently hovering just below the 10-day and 20-day moving averages, which both act as short-term resistance. The 10-day EMA is at $3.88, while the 20-day SMA is at $3.87. The possibility of retesting recent highs may arise if bulls can break above these levels and regain the $4.00 mark with volume.

However, the MACD has flipped bearish and momentum is slightly negative. If price slips below $3.75, stronger support lies near $3.50, which aligns with the lower end of the recent 7-day range. A further decline toward $3.30 might be triggered by a break below that.