Here’s why leveraged bulls with long positions at $1.6 should be worried.
- There was huge liquidity from leveraged longs at $1.6. A drop below the level could trigger wild liquidation risk to leveraged bulls.
SUI has been one of the top-performing layer-1s in 2024, occasionally eclipsing Ethereum and Solana [SOL] on some fronts.
In fact, it was one of the assets which hit an all-time high during the October market recovery. This made the SUI price retracement seen afterward as irresistible for sidelined speculators.
As a result, many speculators opened long positions at around $1.6, and liquidity has been building around the support for a while.
According to Alphractal, the massive liquidity at $1.6 support could trigger wild liquidation should the price slump below the level.
Source: Alphractal
Is SUI liquidation on horizon?
Alphractal argued that $2.2 also saw massive liquidity accumulation when longs were opened at the level. However, the positions were wiped out during the recent pullback. So, will $1.6 suffer the same fate?
Source: SUI/USDT, TradingView
On the price chart, a daily order block (OB) formed in April, has acted as SUI support in September and October ($1.6, white zone).
Additionally, the 50-day EMA (Exponential Moving Average) has been a crucial dynamic support lately, easing the late October and November price plunges.
Put differently, $1.6 was a key Q4 support and has attracted a lot of buy interest and leveraged longs. A crack below could drag SUI to the next support at $1.4.
Spot market demand for SUI has been stagnant, as seen by the sideway movement on OBV (on balance volume). This meant that SUI prices could go in either direction depending on the market sentiment after the US election.
Mixed market interest
Source: Santiment
Santiment data painted the same short-term market caution. Since October, SUI’s open interest (OI) rates have been on a downtrend. With market sentiment also tanking lower at press time, SUI speculators looked cautious ahead of US elections.
However, whales seemed interested in adding positions despite the overall caution. This was implied by positive reading on the Retail vs Whale Delta metric, which gauges whale long positions relative to retail.
Source: Hyblock
In short, there was slight whale interest in SUI. However, its price was at a crucial point as any slump below $1.6 support could expose several leveraged bulls to losses.
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