The needle is flying
The token behind Needle Network rose in double digits on Tuesday as the broader crypto market looked to recover from the latest slump.
Last week, the United States Securities and Exchange Commission (SEC) cracked down heavily on the world’s largest exchanges, Binance and Coinbase. The move spooked the markets, especially the commission that tokenized securities.
Sui (SUI) led today’s gains by 7.9% amid a fresh token correction offer and a brief squeezing of long orders in the futures market.
SUI is a layer-1 blockchain layer created by former members of the Facebook (now Meta) blockchain team with SUI as the original gas-payment and validating token of the network.
While most tokens are still down during the past week, several digital assets have registered modest gains of between one and five percent since Monday.
The total crypto market capitalization has increased by 1% or roughly $10 billion in the past 24 hours.
Bitcoin (BTC) was up just 0.4% on the day, last trading at $26,140, and Ethereum (ETH) was trading down 0.3% at $1,750.
the needle turns liquid
On June 10, Sui Core contributors introduced a Sui Improvement Proposal (SIP) that, if passed, would enable liquidity for the SUI token.
Liquid staking refers to locking tokens in a Proof-of-Stake (PoS) blockchain, earning validator rewards while maintaining the token’s liquidity through a Liquid Token representation of the stake amount.
Currently, SUI validators earn 5.43% annually in SUI rewards for securing the network. Liquid staking will allow investors to earn this reward while actively trading with their Liquid-staked tokens. The annual returns will encourage more users to stake their tokens.
Another factor pulling the SUI price up is a minor contraction in the futures market.
Data from CoinGlass shows that the funding rate for SUI perpetual contracts declined significantly on June 11, indicating that traders opened aggressive short positions.
The funding rate is the periodic payment made between long and short traders in a perpetual contract market based on market demand for these contracts. If the demand for longs increases, the funding rate for traders holding buy positions increases.
Funding rates for SUI futures contracts on crypto derivatives exchanges. Source: CoinGlass.
In case of SUI, most of the traders were short and placed bets on the downside. This created an opportunity for more sophisticated traders to drive the price to the upside and hunt down the stop losses of the majority.
Over the past two days, $2.5 million in SUI long orders were liquidated, according to CoinGlass data, as the funding rate for the contract cooled near neutral values.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.