Sui (SUI) bounced back above the 2 USD mark despite the DeFi TVL falling 15%

Sui (SUI) continues to surge alongside the general recovery of the crypto market, currently trading above 2.00 USD at the time of writing on Thursday. The 3.5% increase of SUI comes after a strong correction, as the price had previously dropped from 2.20 USD to 1.98 USD.

Sui price rises despite DeFi TVL decline

Interest in decentralized finance projects (DeFi) on the Sui ecosystem continues to decline, clearly reflected in the continuously decreasing total value locked (TVL). According to data from DefiLlama, TVL – representing the total value of assets being staked across protocols – has decreased by 15% in just 24 hours, down to 1.35 billion USD.

Previously, the TVL of Sui reached a record high of 2.63 billion USD on October 9, but has been continuously declining since then, reflecting the “risk-averse” sentiment that is prevailing in the crypto market. Many traders are withdrawing assets from staking protocols, indicating that confidence in the SUI token and the growth potential of the ecosystem is weakening. As these tokens return to circulation, selling pressure increases, making the likelihood of Sui's price continuing to adjust downwards more apparent.

TVL of SUI | Source: DefiLlamaMeanwhile, interest from retail investors has remained low since mid-October, indicating that investors are not truly convinced that this Layer-1 token can sustain its short-term recovery.

The situation in the derivatives market is not much better: the Open Interest (OI) has decreased to around 781 million USD on Thursday, down from 835 million USD on Tuesday and 1.84 billion USD on October 1. To support SUI's recovery momentum, OI needs to increase steadily; otherwise, the downward trend may continue and push the price below the 2.00 USD mark.

Open contract of SUI | Source: TradingViewMoreover, the funding rate has dropped to -0.007% at the time of writing, indicating that more and more traders are betting on short positions (Short), thereby increasing selling pressure on the crypto market.

Funding rate of SUI | Source: TradingView## Technical outlook: Sui maintains a crucial support level

From a technical analysis perspective, Sui is trying to maintain trading above the 2.00 USD mark on Thursday. The relative strength index (RSI) has slightly increased to 37, indicating that the downward pressure is showing signs of weakening.

Notably, the MACD indicator has issued a buy signal since Sunday, creating an opportunity for investors to open positions with the expectation that the price of SUI will continue to rise in the short term.

The important resistance levels that SUI needs to conquer include:

Daily SUI/USDT Chart | Source: TradingViewHowever, the fact that SUI is still trading below key moving averages such as the EMA 50, EMA 100, and EMA 200 days indicates that the long-term bearish trend still prevails. To strengthen positive prospects and maintain short-term momentum, SUI needs a strong breakout while also receiving solid support from market momentum.

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