Whale’s $20M position on SUI may liquidate, leading to a deeper market slide

A whale’s $20M long position is in jeopardy, as SUI hovers just above liquidation levels. The position may cause a further slide, as SUI goes down from its recent all-time peak.

A whale’s leveraged position on SUI is threatened if the asset dips to $4.56. The whale has already received a warning for borrowing more than the limit, and for being close to the liquidation threshold. The whale deposited sSUI and SUI in two separate pools to borrow USDC and wUSDT.

As of January 8, SUI hovered around $4.60, though with the occasional dip to a lower level. The crypto market moved sideways, as Bitcoin (BTC) and Ethereum (ETH) slid to a lower range, making other coins and tokens more volatile. 

SUI recently posted its all-time high at $5.33, leading whales to increase positions. The chain is one of the most active in the past year, attracting a new inflow of traders. SUI rallied along with the rest of the market in the last quarter of 2024. 

As a result of SUI’s expansion, the L1 chain acquired a thriving DeFi sector. The whale’s position relies on an ongoing positive price performance, as it was tied to a loan from SUI Lend. 

The whale deposited 4.1M SUI, or $19.3M, to borrow $14.4M in stablecoins. If the loan is liquidated, the whale will retain the stablecoins, while SUILend will become a custodian of the loan. The loan is not similar to a centralized long position, as the whale will not face a total loss. Additionally, the price pressure may be smaller, as the tokens are limited to the DeFi app. 

SUI has slowed down its rally, with open interest also going down from a recent peak above $800M, down to $676M. The asset is still expected to expand, as reflected by the 70% long positions. However, SUI may continue to contract as those long positions are attacked for liquidation.

SUI received a boost from DeFi lending

While the $20M position is at risk, SUILend is one of the key features of the ecosystem. The ability to absorb a loan of that size during liquidation shows the chain has built up its DeFi liquidity. 

SUI hosts more than $1.91B in total value locked, with SUILend arising in the past few months as the leading app. Previously, SUI relied on NAVI Protocol for most of its DeFi activity, but the positive SUI market performance allowed for the growth of lending. Briefly, the value locked on SUI rallied above $2B in the first days of the new year.

SUI also carries more than $414M in stablecoins, taking a part of the newly minted liquidity in 2024. This has allowed DeFi users to expand loans and move into stablecoin positions through lending. 

Will SUI rally to a new peak?

SUI was one of the most rapidly expanding L1 chains, setting up expectations of a path similar to Solana. For now, SUI trades at a much lower range, but the platform aims for a similar type of growth. The prediction of WallStreetBets founder Jaime Rogozinski for a bottom at $4.85 failed for now, as SUI may go through a deeper drawdown.

I’m calling $SUI bottom pic.twitter.com/R1RvlCD1Jk

— wallstreetbets (@wallstreetbets) January 7, 2025

SUI is a relatively new addition with claims to become a major token, and its goal for 2025 is to establish more reliable organic traffic. SUI is now seeking to launch its native AI agent platform, to tap the recent hot trend of AI tokens.

In January, the SUI AI Agents token (SUIAI) is already completing its first month of trading. SUI Agents launched at the end of November 2024, allowing for one-click deployment of AI models. The SUIAI token also has DeFi elements, and has been locked for staking on Ethereum protocols.

SUIAI lined up among the trending tokens of the ecosystem, despite its significant volatility. SUIAI traded at $0.04, still lagging behind the leading SUI ecosystem tokens. The chain mostly carries DeFi assets such as Cetus Protocol (CETUS) and DeepBook (DEEP).

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