If the current technical setup is any indication to follow, Sui (SUI) could see its price drop below $2. On October 14, the token of the Layer-1 Move-programmed blockchain reached a new all-time high of $2.36.

Since then, the altcoin has faced challenges in moving higher, and this analysis explains why SUI might be poised for an extended correction.

Sui Slides Down the Ascending Channel

A look at the SUI/USD 4-hour chart shows that the token has been trading within a rising parallel channel since last month. The rising parallel channel pattern forms when traders connect higher highs and higher lows with two ascending parallel trendlines. The upper trendline connects the highs, while the lower trendline connects the low

This technical pattern is typically a bullish signal, suggesting that a cryptocurrency’s value could increase. However, this only occurs if the price remains above the support line of the lower trendline.

In SUI’s case, the lower trendline support is at $2.03, and as shown below,  SUI’s price is approaching that zone. If the price drops below this level, a significant downswing could follow.

Read more: A Guide to the 10 Best Sui (SUI) Wallets in 2024

Additionally, the same timeframe reveals that the Bull Bear Power (BBP) has turned negative. The BBP is a technical oscillator that measures the relative strength of buyers versus sellers in the market.

When the BBP is positive, bulls dominate, and the price tends to rise. Conversely, a negative BBP indicates that bears are in control. As seen below, the BBP has experienced a sharp decline, suggesting that SUI bears could push the price lower.

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Author: Victor Olanrewaju