The stock $SUI has broken.

A key support level with increasing negative expectations.

Derivatives data has shown a decrease in interest and an increase in short positions.

Network activity has sharply declined, indicating weak fundamental support.

The price of $SUI (SUI) has come under severe pressure in recent days, raising concerns among traders and investors about the possibility of a deeper correction in the near term.

After a promising rise above $4, SUI has reversed its gains and is now touching a critical support area that may determine its next major direction.

Notably, #SUI opened the week on a bearish trend and continued to decline, dropping over 5% in the past 24 hours to trade around $2.75. This marks a significant retreat from its recent high of $3.51.

Although the stock still maintains a notable gain of 255% over the past year, its short-term momentum has weakened significantly.

Price analysis $SUI indicates caution.

SUI recently broke down from a triangle pattern, triggering a wave of selling that pushed the coin to a familiar support level at $2.78, which was the low in late March.

Failing to maintain this area at the daily close could lead to a sharp decline towards the $2.24 level, which aligns with the 23.6% Fibonacci retracement level from the all-time high of $5.35 and the low since the beginning of the year at $1.71.

Adding to the concern, momentum indicators are sending mixed signals, albeit generally negative.

As the Relative Strength Index (RSI) approaches oversold levels at 33.64, it has also formed a bullish divergence that some traders believe could indicate a reversal.

However, the Moving Average Convergence Divergence (MACD) indicator remains in a bearish zone and does not show any clear signs of upward momentum so far.

The SUI derivatives market shows a bearish trend.

Data from Coinglass indicates a significant decline in open interest (OI) for SUI stock, currently at $1.15 billion - the lowest level in nearly two months.

This represents a 43% drop from its peak of $2.05 billion recorded in May, indicating a clear outflow of capital from the derivatives market.

The decline in open interest is accompanied by a decrease in the funding rate weighted by open interest, which currently stands at 0.0060%, also indicating a waning bullish enthusiasm.

Additionally, the buy/sell volume among buyers shows that short positions now dominate, representing 55% of the volume, compared to 45% for long positions.

These figures indicate a critical shift in trader sentiment, as the buy/sell ratio at 0.8195 suggests a prevailing bearish inclination.

Unless sentiment improves, downward pressure on spot prices is likely to continue.

The head and shoulders pattern suggests a target of $2.20.

Technical analysts have noted the emergence of a head and shoulders pattern on the daily chart of SUI, reinforcing bearish expectations.

According to market analyst Nebra,skan,Gooner, this classic reversal could push SUI stock into the $2.20 range by early July.

The collapse from the right shoulder coincided with the rejection of the 99-day simple moving average, highlighting the failure to maintain key technical levels.

The $3.00-$3.10 area, which previously served as support, now forms a significant resistance barrier.

If bulls fail to reclaim this area in the coming sessions, the bearish pattern may continue, increasing pressure on short-term price action.

The fading network activity raises further doubts.

On-chain metrics also paint a bleak picture of SUI's near-term prospects.

Daily transaction volume on the network has dropped from over 19 million to just 9 million, while the number of daily active accounts has decreased from 1.66 million to about 320,000, according to Sui Vision data.

This sharp decline in network activity reflects a decrease in interest and suggests that the previous rise may have been driven more by speculation than by sustainable demand.

The loss of momentum in both price and usage confirms the difficulty SUI may face in achieving a quick recovery.

Despite a slight recovery in the futures market, with open interest remaining around $1.2 billion, broader expectations remain cautious.

Market participants appear to be waiting for clearer signals before committing to new trades.

What should be watched for in the future?

All eyes are now on the support level of $2.78. A successful bounce from this area could open the door for a return to the psychological level of $3, and perhaps towards the monthly high of $3.55.

Nonetheless, any breakdown followed by a failed retest could pave the way for a decline to $2.20 or lower.

Looking ahead, analysts such as CoinLore anticipate a potential price range between $3.77 and $5.80 by the end of 2025.

However, while this indicates room for long-term growth, the near-term path remains uncertain due to technical weakness and dwindling on-chain trading activity.

For now, until the bulls reclaim key resistance levels and the network fundamentals stabilize, SUI's short-term outlook is likely to remain fragile.

Traders should closely monitor technical support areas and overall market sentiment before making any strong moves.