Allegations of $400M Insider Sales Cast Doubt on SUI’s Price Rally
Insider Trading and Price Predictions for SUI
Analysts are questioning whether SUI can continue its rally in the face of allegations and potential competition from Solana.
Last updated: October 15, 2024 11:43 EDT
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Harvey Hunter is a Junior Content Creator at Cryptonews.com. With a background in Computer Science, IT, and Mathematics, he seamlessly transitioned from tech geek to crypto journalist.
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The SUI price has hit a roadblock following allegations of $400 million in insider trading, causing investors to lose confidence in the asset.
This comes after a strong week for SUI, which saw a 11.0% increase since last Tuesday and a massive 120% rally, positioning it as one of the top performers this month.
However, investor sentiment towards SUI has shifted, with a significant 22.27% drop in trading volume to $946 million in the past 24 hours.
The allegations of insider trading originated from a post on October 14th by pseudonymous crypto analyst Light. The analyst questioned SUI’s current valuation and claimed that insiders, including a wallet tied to the foundation, profited from the price surge through a $400 million sell-off.
According to Light, insiders began selling significant amounts of SUI at lower prices and continued to do so even as the price escalated.
In response, SUI issued a statement denying any wrongdoing, stating that insiders have not engaged in pre-emptive selling or violated lockup agreements. They attributed the sell-off to an infrastructure partner who is complying with lockup schedules enforced by qualified custodians.
The allegations have raised doubts about SUI’s long-term prospects, casting a shadow over recent bullish technical developments on the SUI price chart, including a successful breakout of a cup and handle pattern.
The Relative Strength Index (RSI) currently stands at 80, indicating an overbought condition and suggesting a potential correction in the near future.
There are concerns about whether SUI’s fully diluted valuation (FDV) of $23 billion is justified, with questions arising about whether the project has demonstrated a fraction of the potential of Solana.
A correction in the near term is expected, with the upper bound of the pattern at $2.0725 being a critical level. However, additional challenges could arise with a $114 million token unlock scheduled for October 23rd, representing 2.32% of the circulating supply.
On the optimistic side, if SUI can maintain a decisive breakout of the pattern, a conservative price target of around $3.75 by 2025 is plausible. The exponential growth and adoption of the SUI ecosystem also suggest the potential for a larger price surge, possibly reaching $5.
While SUI’s bullish momentum may continue, the significant insider selling raises concerns for new investors. According to Light, tokens where insiders are selling to retail investors often have a predictable outcome.
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Disclaimer: Cryptocurrency is a high-risk asset class. This article is for informational purposes only and does not constitute investment advice. You could potentially lose all of your capital.
