Analysis of the SUI/USDT price action indicates the confirmation of a bearish head and shoulders pattern with a likely drop to $1.70.
Bearish Trend and Head and Shoulders Pattern
The formation of the head and shoulders is a classic trend reversal signal. The left shoulder peaked in mid-December, followed by the head forming a higher peak in January. By February, the right shoulder developed, showing a lower high. This structure suggests a potential shift in market sentiment. The neckline, a critical support level, formed around $2.90. After breaking below it, the price fell rapidly, confirming the shift to a downward trend.
Volume and Market Structure Support Bearish Outlook
The market structure shifted from higher highs and lows to lower highs and lows. Post-breakdown candlestick patterns indicate strong bearish momentum, with sellers dominating the action. The support zone near $2.30 temporarily halted the decline, but the price failed to gain bullish momentum and continued downward. The target drop to $1.70 aligns with the height of the head subtracted from the neckline level.
Key Takeaways for Traders
Traders focused on technical analysis recognize this setup as a strong bearish signal. A sustained drop below $2.30 could open doors for further downside. Increased selling pressure suggests that recovery attempts might face resistance at previous support levels. Volume confirmation remains crucial for further validation.
A confirmed bearish breakout increases the likelihood of reaching $1.70, advising traders to exercise caution.
