SUI token unlock event scheduled to take place this week, which could lead to selling pressure

After a significant price increase, a $265 million SUI token unlock is scheduled to take place this week, which could lead to selling pressure.

A $265 million SUI token unlock is scheduled to take place this week, which could lead to selling pressure.

However, the new supply may be absorbed smoothly by the market as on-chain data shows that the network’s fundamentals have been strengthening.

Around 74 million Sui (SUI) tokens, or 2.28% of the circulating supply, will be unlocked on May 1, according to data from Tokenomist. The pending release adds fresh selling pressure at a moment when demand has been heating up. So far, only 33% of the total SUI supply is unlocked.

Meanwhile, Sui’s on-chain fundamentals have been strengthening. Total value locked on Sui-based protocols climbed 40% since the beginning of April, now sitting at $1.73 billion, as per DeFiLlama data.

Stablecoin market cap on the network also jumped from $630 million to $880 million over the same period, while daily decentralized exchange volume has been hovering around $500 million.

The network has handled over $3.6 billion in trading over the last seven days, lifting its monthly volume past $11 billion.

With fresh supply about to hit the market, some traders may take profits after last week’s gains. However, others see the growing DeFi metrics as signs that Sui can absorb the new tokens without a downturn.

SUI is trading around $3.62 after a strong breakout above the $3.30 resistance zone. Bullish signals across key indicators have supported the rally. With a relative strength index of 78, the asset appears to be overbought, signaling potential exhaustion in the short term. Momentum indicators are still in favor of buyers, and the moving average convergence / divergence is still in positive territory.

In addition, all estimated moving averages indicate a buy. If buying pressure holds and SUI stays above $3.60, it could attempt a move toward $4.00, a psychological level that may attract more momentum traders.

On the negative side, SUI might retest support at $3.30 if selling pressure from the May 1 unlock starts to build. A deeper pullback might find further support around the $3.00 area, near the 10-day EMA. If the market smoothly absorbs the unlock, SUI may settle between $3.30 and $3.60 before establishing a new trend.