Layer 1 blockchain protocol Sui (SUI) has made headlines lately, recording a powerful 120% improve over the previous 30 days, permitting the protocol’s native token SUI to outperform the highest 10 largest cryptocurrencies in the marketplace, culminating in a brand new all-time excessive of $2.35 on October 13.
Nonetheless, since this peak, the token has retreated by almost 5%, largely on account of rising issues over allegations of insider promoting among the many challenge’s stakeholders.
Can SUI Match Solana’s Success?
Market professional LightCrypto took to social media platform X (previously Twitter) on Sunday to precise his skepticism in regards to the sustainability of SUI’s latest beneficial properties. In a prolonged submit, he famous SUI’s substantial rise, which has quintupled from its earlier lows of $0.5 on August 5, amid the broader market crash that occurred that day.
Whereas the market seems to be keen for brand new winners, with macroeconomic situations pointing to additional value beneficial properties, LightCrypto raised two vital factors that might undermine SUI’s upward trajectory.
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Firstly, the professional questioned the rationale behind SUI’s present $23 billion absolutely diluted valuation (FDV), significantly when in comparison with Solana’s $73 billion based on Coingecko information.
LightCrypto argued that it now not is smart to imagine SUI can replicate Solana’s success, particularly on condition that it at the moment trades at only a quarter of Solana’s market valuation.
The professional additional challenged the group to articulate a compelling risk-reward situation that justifies such a disparity, asking whether or not SUI has demonstrated even a fraction of Solana’s potential.
Potential Market Correction Looms
Secondly, LightCrypto alleged the worrying pattern of insider promoting, indicating that insiders, together with what’s believed to be a big endowment fund, have dumped round $400 million in tokens throughout the latest rally.
The professional famous that this promoting pattern has not solely occurred at greater value ranges, however has additionally been ongoing since a lot decrease valuations.
Finally, LightCrypto believes that the acceleration of those gross sales might create a disconcerting ambiance for retail buyers, who could also be shopping for tokens from these finest knowledgeable about their true worth.
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The implication is stark: as these supposed insiders money out whereas retail buyers chase momentum, the potential for a market correction looms giant, probably threatening the token’s present rally.
Regardless of these allegations, SUI, at the moment buying and selling at $2.24, continues to see important investor curiosity within the token, with buying and selling quantity up 36% in Sunday’s session, valued at roughly $1.7 billion.
Moreover, no matter LightCrypto’s troubling findings, corrections are regular after a token hits a brand new report excessive, with the clear instance of Bitcoin (BTC), which has been unable to return near that stage since hitting a brand new report excessive of $73,7000.
What is for certain is that if the professional’s claims show to be true, it may additional exacerbate a possible correction within the SUI value, with the primary main assist stage for bulls being the $2.046 space.
Featured picture from DALL-E, chart from TradingView.com
