Can Sui swim against the tide thanks to the upward momentum of the stablecoin market?

SUI – one of the fastest-growing cryptocurrencies of 2024 – has made a strong impression thanks to its impressive network expansion speed.

However, in the context of a continuously fluctuating market, what is the current operational performance of this network along with the SUI token?

As of the time of writing, SUI is trading around $2.20, almost erasing all the gains achieved at the end of March.

The current price is equivalent to a correction of about 58% from the historical peak established in the first week of January.

Price action of SUI | Source: TradingViewNevertheless, SUI has maintained stable liquidity at 5.77 billion USD since August – a notable figure despite recent downward pressures.

Notably, selling pressure has significantly weakened as prices fell below the $2.20 range – seemingly supported by the ascending support line formed since last September.

On the contrary, the rally at the end of March was restrained by the unstable sentiment related to the new tax policies.

In the context of selling pressure showing signs of easing and the price currently sitting above a key support zone, can SUI soon recover its upward momentum?

It is important to emphasize that the increase at the end of March only occurred after SUI broke through the long-term descending resistance line – a signal indicating that there is still room for recovery, if positive liquidity flows return to the market.

The prospects of SUI brighten as the network reports improvements in many core metrics

The Sui network is showing positive signals as liquidity and on-chain activity indicators are all on the rise. Notably, stablecoin liquidity – an important indicator reflecting the financial strength of the ecosystem – is steadily growing and has just reached a significant milestone.

In the past 24 hours, Sui has led the rankings in stablecoin capital inflows, surpassing well-known blockchains like Solana and Tron. Specifically, on April 4th, the network recorded a stablecoin capital inflow of approximately 37.5 million USD – indicating the increasing appeal of the Sui ecosystem to investors.

Stablecoin market capitalization and TVL of SUI | Source: DeFiLlamaThis is not a temporary sign. Over the past few days, the stablecoin market capitalization on SUI has continuously recovered and set a new peak at 1.29 billion USD. This upward trend indicates that liquidity on the network is expanding – a key factor driving the development and adoption of DeFi protocols within the ecosystem.

SUI Network Fees | Source: DeFiLlamaHowever, the recovery picture of Sui is not entirely uniform. The total value locked (TVL) converted to USD is still struggling to regain its form. Nevertheless, when looking at the amount of SUI tokens locked, the trend shows a steady recovery since mid-December.

As of April 5th, a total of 585.63 million SUI has been locked in protocols – a significant increase from below 350 million SUI in mid-December 2024. This increase partly reflects the long-term confidence of the community in the value of SUI, as many investors choose the "HODL" strategy by locking their assets.

Another indicator showing the resurgence of Sui is the transaction fees on the network. After a period of decline since the beginning of the year – with a low of only 4,210 USD on February 10 and 7,610 USD on March 8 – network activity has shown a significant recovery over the past two weeks.

Specifically, on-chain transaction fees have skyrocketed, reaching $51,940 on April 2 – many times higher than the previous lull period. This recovery is a clear indicator that users are returning to the ecosystem, contributing to the sustainable growth momentum of Sui in the near future.

Can SUI recover?

Currently, SUI is trading at a price support level that has been maintained for the past 6 months — a potential area for recovery if buying power returns to the market.

However, the sell-off trend has still dominated since January, as investor sentiment has been negatively affected by concerns related to tax policies. In this context, the prospects for a strong recovery remain highly uncertain.

A few signs of mild accumulation have started to appear. For instance, since April 1st, the total amount of capital poured into SUI in the spot market has reached nearly 10 million USD.

Nonetheless, this figure remains quite modest, clearly reflecting the cautious sentiment of investors following the recent wave of adjustments due to pressure from macroeconomic factors.

However, the current deep discount of SUI may soon become an attractive point, especially if the overall market enters a phase of clear recovery.

View SUI price here.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions.

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SN_Nour

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