SUI volume surges but price falls? Unveiling the contradiction between SUI on-chain activities and traders exiting after BTCfi launched.

The monthly trading volume of SUI has surpassed the total of AVAX, HYPE, and NEAR, reaching 44.59 billion USD. The surge in volume coincides with the launch of BTCfi on DeepBook and the record growth of TVL. As of the time of writing, according to data from CoinMarketCap, Sui [SUI] has fallen by 4% in the past 24 hours. Following a brief rise earlier this week, this decline reflects the overall sentiment in the Crypto Assets market. SUI once soared to a local high of 4.40 USD, and despite the pullback, the on-chain trading volume remains strong. Data from CoinGecko shows that SUI's trading volume continues to rise. However, behind such impressive volume, traders seem to be exiting; what exactly is happening?

SUI Wins the Competition: Volume is Amazing, Surpassing Competitors

(Source: CoinGecko)

According to the analysis, the trading volume of the SUI token surpassed the total of Avalanche (AVAX), Hyperliquid (HYPE), and Near Protocol (NEAR). The trading volume of SUI in July was $44.59 billion, which is $8 billion higher than its competitors. This trading volume encompasses all swap trades on centralized exchanges (CEX) and decentralized exchanges (DEX), demonstrating the widespread acceptance of this altcoin.

What has driven this surge? The launch of BTCfi and TVL hits an all-time high

(Source: DefiLlama)

One of the main driving factors for SUI's volume is its DeFi protocol, which now supports Bitcoin [BTC]. Considering the scalability challenges of BTC tokens, this is a new milestone. BTCfi will allow Bitcoin to provide liquidity for funding pools, trading perpetual contracts and options, leverage, and lending on SUI's DeepBook. As stated by X (formerly Twitter), this will introduce a whole new liquidity on the L1 blockchain.

Since January, SUI's total locked value has increased by over 480%, reaching $2.295 billion by the end of July. When considering liquidity staking, borrowing, and re-evaluated funds, the total TVL reached $3.48 billion, setting a new historical high. Stablecoin activity also remains strong, with a market cap of $1.036 billion and a daily inflow of $2.36 million, indicating stable capital deployment across protocols.

SUI flips Ichimoku Cloud resistance, but traders are exiting?

(Source: Trading View)

Despite the fact that altcoins lead in volume, the price is trying to maintain above the Ichimoku cloud. The price trend has broken through that level, which aligns with the descending trend line. The trading price of SUI is $3.82, and the price seems to have retested the $3.61 area.

However, despite the impressive volume and TVL data, there are signs of traders exiting:

Momentum Oscillator: Shows a moderate bullish momentum, but sellers dominate the trading volume.

Money Flow Index (MFI): Decreased to 36.47, indicating that despite structural growth showing positive growth, funds are still flowing out of the asset.

Derivatives data shows a cautiously optimistic outlook

Despite the weak prices, derivative product data shows a cautiously optimistic outlook. The funding rate weighted by open interest remains positive, indicating that bullish traders are still paying for the bears. Meanwhile, open interest has decreased from $2.66 billion to $2.41 billion, but importantly, it remains above the $2 billion threshold. This resilience suggests that even amidst a broader market pullback, institutional or whale interest has not completely dried up.

Conclusion:

SUI demonstrated impressive volume and TVL growth in July, thanks to the launch of BTCfi and the expansion of its DeFi ecosystem. However, signs of price weakness and traders exiting indicate that the market remains cautious about its short-term trend. Whether SUI can convert its strong on-chain activity into sustained price rises will be a key focus moving forward.