This article is available in Spanish.
Layer 1 blockchain protocol Sui (SUI) has recently made headlines, with an impressive 120% increase in the past 30 days, helping the protocol’s native token SUI outperform the top 10 largest cryptocurrencies on the market, culminating in a new one highest ever from $2.35 on October 13th.
However, since this peak, the token has fallen by almost 5%, largely due to growing concerns over insider selling allegations among the project’s stakeholders.
Can SUI match Solana’s success?
Market expert LightCrypto expressed his skepticism about the sustainability of SUI’s recent gains on social media platform X (formerly Twitter) on Sunday. In a long one afterhe noted the substantial rise in SUI, which has increased fivefold from its previous low of $0.5 on August 5, amid the broader market crash that occurred that day.
While the market seems to be yearning for new winners as macroeconomic conditions point further prize winningsLightCrypto raised two critical points that could undermine SUI’s upward trajectory.
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First, the expert questioned the rationale behind SUI’s current fully diluted valuation (FDV) of $23 billion, especially compared to Solana’s $73 billion according to Coingecko. facts.
LightCrypto argued that it no longer makes sense to assume that SUI can replicate Solana’s success, especially considering that it currently trades at only a quarter of Solana’s market value.
The expert further challenged the community to formulate a compelling risk-reward scenario that justifies such a disparity, questioning whether SUI has demonstrated even a fraction of Solana’s potential.
Potential market correction looms
Secondly, LightCrypto alleged the worrying trend of insider sellingThis indicates that insiders, including what is believed to be a large endowment fund, dumped around $400 million worth of tokens during the recent rally.
The expert noted that this selling trend has not only occurred at higher price levels, but has also persisted since much lower valuations.
Ultimately, LightCrypto believes the acceleration of this sale could create an unsettling atmosphere for retail investors, who may purchase tokens from those best informed of their true value.
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The implication is stark: As these so-called insiders make money while retail investors chase the momentum, the potential for one market correction threatens to become big and could threaten the token’s current rally.
Despite these accusations, SUI, which currently trades at $2.24, continues to see significant investor interest in the token, with trading volume up 36% in Sunday’s session, valued at about $1.7 billion.
Furthermore, regardless of LightCrypto’s troubling findings, corrections are normal after a token reaches a new token record highwith the obvious example of Bitcoin (BTC), which has not been able to get close to that level since hitting a new all-time high of $73,700.
What is certain is that if the expert’s claims turn out to be true, it could further exacerbate a potential correction in SUI price, with the first major support level for bulls being the $2,046 area.
Featured image of DALL-E, chart from TradingView.com