Layer 1 blockchain protocol Sui (SUI) has made headlines lately, recording a powerful 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.
Nonetheless, since this peak, the token has retreated by almost 5%, largely as a result 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 positive aspects. 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 spanking new winners, with macroeconomic circumstances pointing to additional worth positive aspects, LightCrypto raised two essential factors that would 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 in keeping with Coingecko knowledge.
LightCrypto argued that it now 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 professional 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 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 through the latest rally.
The professional famous that this promoting pattern has not solely occurred at larger worth 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 traders, 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 traders chase momentum, the potential for a market correction looms massive, doubtlessly 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 come back near that degree since hitting a brand new document excessive of $73,7000.
What is for certain is that if the professional’s claims show to be true, it might additional exacerbate a possible correction within the SUI worth, with the primary main help degree for bulls being the $2.046 space.
Featured picture from DALL-E, chart from TradingView.com
