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Layer 1 blockchain protocol Sui (SUI) has made headlines just 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.
Nevertheless, since this peak, the token has retreated by practically 5%, largely resulting from rising considerations over allegations of insider promoting among the many undertaking’s stakeholders.
Can SUI Match Solana’s Success?
Market skilled LightCrypto took to social media platform X (previously Twitter) on Sunday to specific his skepticism concerning the sustainability of SUI’s current good points. 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 situations pointing to additional value good points, LightCrypto raised two important factors that would undermine SUI’s upward trajectory.
Associated Studying
Firstly, the skilled questioned the rationale behind SUI’s present $23 billion absolutely diluted valuation (FDV), notably 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 provided that it at the moment trades at only a quarter of Solana’s market valuation.
The skilled 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 throughout the current 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 ambiance for retail traders, who could also be shopping for tokens from these greatest 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 giant, doubtlessly threatening the token’s present rally.
The 1D chart reveals SUI’s value uptrend. Supply: SUIUSDT on TradingView.com
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 file excessive, with the clear instance of Bitcoin (BTC), which has been unable to return 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