Layer 1 blockchain protocol Sui (SUI) has made headlines not too long ago, recording a formidable 120% enhance 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.
Nevertheless, since this peak, the token has retreated by practically 5%, largely resulting from rising issues over allegations of insider promoting among the many venture’s stakeholders.
Can SUI Match Solana’s Success?
Market knowledgeable 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 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 positive factors, LightCrypto raised two crucial factors that would undermine SUI’s upward trajectory.
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Firstly, the knowledgeable questioned the rationale behind SUI’s present $23 billion absolutely diluted valuation (FDV), significantly when in comparison with Solana’s $73 billion in response to Coingecko information.
LightCrypto argued that it not is sensible 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 knowledgeable additional challenged the neighborhood to articulate a compelling risk-reward state of affairs 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 knowledgeable famous that this promoting pattern has not solely occurred at larger value ranges, however has additionally been ongoing since a lot decrease valuations.
In the end, 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 greatest 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 massive, doubtlessly threatening the token’s present rally.
Regardless of these allegations, SUI, at the moment buying and selling at $2.24, continues to see vital 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 knowledgeable’s claims show to be true, it might 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
