SUI Leads Crypto Market Recovery With 8% Rise Overnight

Sui is soaring.

The token behind Sui Network is up double digits on Tuesday as the wider crypto market looked to recover from the latest downturn.

Last week, the United States Securities and Exchange Commission (SEC) took hefty action against the world’s largest exchanges, Binance and Coinbase. The move shook markets, specifically tokens the Commission termed securities.

Sui (SUI) led today’s gains with a 7.9% uptick amid a fresh tokenomics improvement proposal and a short squeeze of long orders in the futures market.

Sui is a layer-1 blockchain layer built by former members of Facebook’s (now Meta) blockchain team with SUI as the native gas-paying and validating token of the network.

While most tokens are still down over the past week, several digital assets posted modest gains between one and five percent since Monday.

The total crypto market capitalization is up 1%, or roughly $10 billion, in the last 24 hours.

Bitcoin (BTC) was up just 0.4% on the day, last trading at $ 26,140, and Ethereum (ETH) shed 0.3% to trade at $1,750.

Sui goes liquid

On June 10, Sui core contributors introduced a Sui Improvement Proposal (SIP) that, if passed, would enable liquid staking for SUI tokens.

Liquid staking refers to locking tokens in a proof-of-stake (PoS) blockchain to earn validator rewards while retaining the token’s liquidity through a liquid token representation of the staked amount.

Currently, SUI validators earn 5.43% annually in SUI rewards for securing the network. Liquid staking would allow investors to earn this reward while actively trading with their liquid-staked tokens. The annual yields will likely motivate more users to stake their tokens.

Another factor pulling up SUI’s price is a short squeeze in the futures market.

Coinglass data shows that the funding rate for SUI perpetual contracts dropped significantly on June 11, indicating that traders opened aggressive short positions.

The funding rate is a periodic payment made between long and short traders in a perpetual contract market depending on the market’s demand for these contracts. If the demand for longs rises, the funding rate increases for traders holding buy positions.

The funding rate for SUI futures contracts on crypto derivative exchanges. Source: Coinglass.

In SUI’s case, most traders were short and bet on its price going down. This created an opportunity for more sophisticated traders to run the price to the upside and hunt the stop losses of the majority.

In the last two days, $2.5 million SUI long orders were liquidated, per Coinglass data, as the funding rate for the contract cooled near neutral values.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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Source: https://decrypt.co/144347/sui-leads-crypto-market-recovery-rise-overnight