SUI price drops 70% from market debut top amid excessive supply concerns

The terms of Sui (SUI) has dropped sharply after its marketplace debut crossed starring cryptocurrency exchanges.

On May 5, the SUI terms was $1.26 per token, down astir 70% from its grounds precocious of astir $4, established 2 days agone connected Binance.

Interestingly, connected different exchanges similar Kraken, the token’s marketplace apical was $1.60 oregon lower, suggesting it was successful “price discovery” mode aft the launch.

SUI/USD regular terms chart. Source: TradingView

Still, SUI maintains its wide marketplace gains, up astir 1,200% from its marketplace debut.

Early SUI terms fundamentals

SUI’s archetypal uptrend drew support from traders who presumption Sui — a caller introduction into the agelong database of layer-1 blockchain projects — arsenic perchance much scalable than its rivals.

Mysten Labs, Sui’s archetypal contributor, asserts that it volition go the archetypal internet-scale programmable blockchain level acknowledgment to its claims of processing astir 300,000 transactions per second. In comparison, Solana handles up to 10,000 transactions per second.

Venture capitalists led by Andreessen Horowitz and FTX Ventures have invested $336 cardinal successful the Sui project via 2 concern rounds successful 2021 and 2022. Mysten Labs confirmed that the rounds gave investors entree to its firm’s equities, not SUI tokens.

However, the project’s token economics shows that it has allocated 14% of its 10 cardinal SUI proviso to investors. Mysten Labs has not yet revealed erstwhile it volition administer these tokens oregon immoderate associated vesting schedule.

SUI token organisation exemplary arsenic of May 1. Source: Messari

Regarding FTX Ventures, a subsidiary of the now-defunct FTX crypto exchange, Mysten Labs repurchased the involvement held by the steadfast successful April 2023. Furthermore, it took backmost the rights to bargain SUI tokens antecedently held by FTX for astir $96 million.

SUI proviso overload?

Traders and analysts person shown their condemnation successful the Sui project’s goals to go an charismatic blockchain alternative. However, determination are besides concerns astir SUI’s proviso schedule.

Related: What is Tokenomics? A beginner’s usher connected proviso and request of cryptocurrencies

Notably, the Sui Foundation plans to summation the SUI proviso by astir 15% by the extremity of 2023, which, according to expert Dmitriy Lavrov, could punctual traders to hold for further terms declines earlier entering the market.

Yes, it makes consciousness to hold for amended prices.

From a short-term method perspective, the SUI terms faces interim sell-off unit adjacent $1.31.

A pullback script could person the token oculus $1.26 arsenic its short-term downside target. And accidental the oversupply script prevails. Then, the terms could driblet to $1.21 connected May 5 oregon implicit the weekend, down 7% from existent prices. 

SUI/USD 15-minute terms chart. Source: TradingView

Conversely, expert Ameba sees SUI rising toward $1.50 successful May based connected its decisive adjacent supra its descending trendline resistance. Fellow trader Crypto Mikey projects a akin uptrend for the Sui price.

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.