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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 available on the market, 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 as a consequence of rising issues over allegations of insider promoting among the many mission’s stakeholders.
Can SUI Match Solana’s Success?
Market knowledgeable LightCrypto took to social media platform X (previously Twitter) on Sunday to specific his skepticism concerning the sustainability of SUI’s current positive factors. In a prolonged put up, 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 spanking new winners, with macroeconomic circumstances pointing to additional value positive factors, LightCrypto raised two essential factors that might undermine SUI’s upward trajectory.
Associated Studying
Firstly, the knowledgeable questioned the rationale behind SUI’s present $23 billion totally diluted valuation (FDV), notably when in comparison with Solana’s $73 billion in accordance with Coingecko knowledge.
LightCrypto argued that it not is smart to imagine SUI can replicate Solana’s success, particularly provided that it at present 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 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 through the current rally.
The knowledgeable famous that this promoting development has not solely occurred at larger 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 environment for retail traders, who could also be shopping for tokens from these finest knowledgeable about their true worth.
Associated Studying
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, at present 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 document excessive, with the clear instance of Bitcoin (BTC), which has been unable to return near that degree since hitting a brand new document excessive of $73,7000.
What is for certain 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 degree for bulls being the $2.046 space.
Featured picture from DALL-E, chart from TradingView.com
