Layer 1 blockchain protocol Sui (SUI) has made headlines just lately, recording a formidable 120% enhance over the previous 30 days, permitting the protocol’s native token SUI to outperform the highest 10 largest cryptocurrencies available on the market, culminating in a brand new all-time excessive of $2.35 on October 13.
Nevertheless, since this peak, the token has retreated by almost 5%, largely as a result of rising considerations over allegations of insider promoting among the many mission’s stakeholders.
Can SUI Match Solana’s Success?
Market skilled LightCrypto took to social media platform X (previously Twitter) on Sunday to precise his skepticism in regards to the sustainability of SUI’s latest positive factors. In a prolonged publish, 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 positive factors, LightCrypto raised two important factors that might undermine SUI’s upward trajectory.
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Firstly, the skilled questioned the rationale behind SUI’s present $23 billion totally diluted valuation (FDV), notably when in comparison with Solana’s $73 billion based on Coingecko knowledge.
LightCrypto argued that it now not is sensible to imagine SUI can replicate Solana’s success, particularly on condition that it presently trades at only a quarter of Solana’s market valuation.
The skilled additional challenged the neighborhood 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 development of insider promoting, indicating that insiders, together with what’s believed to be a big endowment fund, have dumped round $400 million in tokens in the course of the latest rally.
The skilled famous that this promoting development has not solely occurred at greater value ranges, however has additionally been ongoing since a lot decrease valuations.
In the end, LightCrypto believes that the acceleration of those gross sales could create a disconcerting environment for retail traders, who could also be shopping for tokens from these greatest knowledgeable about their true worth.
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The implication is stark: as these supposed insiders money out whereas retail traders chase momentum, the potential for a market correction looms massive, probably threatening the token’s present rally.
Regardless of these allegations, SUI, presently 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 file excessive, with the clear instance of Bitcoin (BTC), which has been unable to come back near that stage since hitting a brand new file excessive of $73,7000.
What is definite is that if the skilled’s claims show to be true, it may additional exacerbate a possible correction within the SUI value, with the primary main help stage for bulls being the $2.046 space.
Featured picture from DALL-E, chart from TradingView.com
