Sui rally stalls amid $9.3 million weekly fund inflows and price swings in the broader market

• Sui's bullish momentum falters on Monday, reflecting possible profit-taking after rallying to $4.30.
• Digital asset inflows into Sui's products reached $9.3 million last week on renewed sentiment in the wider crypto market.
• Sui's DeFi TVL remains above $2 billion, signaling growing investor confidence in the layer-1 protocol.

Sui's (SUI) price faces headwinds around $3.71 on Monday, following a slightly bullish Sunday. The layer-1 blockchain token has, since the sentiment-driven rally to $4.30 on May 12, been confined below $4.00 despite consistency in digital asset inflows, which reached $9.3 million last week.

Sui struggles to sustain the uptrend despite consistent fund inflows 

Sentiment around Sui remained elevated last week, with digital fund inflows in the ecosystem's financial products hitting $9.3 million, according to a CoinShares report. Sui boasts $332 million in assets under management (AUM), falling behind Ripple's (XRP) $1.42 billion and Solana's $1.6 billion.

Digital asset investment products recorded $785 million in total, marking the fifth consecutive week of inflows, with Bitcoin (BTC) accounting for the lion's share at approximately $557 million. 

Digital asset inflows | Source: CoinShares

Ethereum (ETH) emerged as the standout performer, with over $205 million in inflows, buoyed by renewed investor optimism around the Pectra upgrade.

Sui's fund inflows steadied, mirroring renewed sentiment in the protocol's Decentralized Finance (DeFi) Total Value Locked (TVL), which remains slightly above $2 billion, according to DefiLlama data.

TVL is the sum of the value of all coins held in smart contracts of all the protocols on the chain. The chart below highlights the consistent increase in the TVL from around $1.78 billion on May 1. 

A rising TVL is a bullish indicator, reflecting heightened confidence and renewed interest in the protocol. Investors lock assets in smart contracts when they trust the network's long-term value and anticipate substantial price growth.

Sui DeFi TVL | Source: DefiLlama

Meanwhile, Sui's stablecoin market capitalization soared 23.5% last week, reaching $1.09 billion, with USDC leading as the primary asset. This growth is mirrored by a staggering 10.47% surge in decentralized exchanges (DEXs) volume, hitting $4.14 billion weekly.

Looking ahead: How far can Sui's pullback go?

Sui's price is down over 6% on the day to $3.71 at the time of writing. Intraday declines hit $3.59 on Monday, reflecting broader swings between support and resistance in the crypto market. 

The Relative Strength Index (RSI) has been trending sharply downward, nearing the 50 midline after hitting overbought levels at 75.53 on May 8. This consistent decline aligns with Sui's retreat from its peak of $4.30, suggesting sellers still hold a short-term advantage.

Beyond the immediate support at $3.50 previously tested in late April and in February, key monitoring levels lie at the descending trendline, as illustrated on the daily chart, the demand area at $3.26 near the 50-day Exponential Moving Average (EMA) and the 200-day EMA around $2.96.

SUI/USDT daily chart

Although the short-term trend appears bearish, Sui remains well above the 50-day EMA at $3.26, the 100-day EMA at $3.12, and the 200-day EMA at $2.96. The upward trajectory of these moving averages indicates that buyers maintain control over sellers, suggesting caution against overly bearish outlooks.