- Sui price surged and then nosedived as insiders and early purchasers dumped the token.
- As a platform, competition is the biggest challenge that Sui faces.
- It is competing with the likes of Cardano, Ethereum, and BNB Chain.
Sui price has crashed hard as the recent momentum faded as many insiders liquidate their positions and as investors assess its value. The token was trading at $1.32 on Thursday, which was much lower than this week’s high of $2.86. So, is it safe to buy the Sui token dip?
Sui faces one key challenge
Sui is a new blockchain project that seeks to disrupt the smart chain industry. The platform’s mainnet was unveiled on Wednesday, meaning that it is now possible for developers to build decentralized applications (dApps) in all industries.
Sui says that it has more features than existing blockchains, including faster speeds, more interoperability, and low transaction costs. Also, it ha object-centric features that make it possible for its assets to live on-chain and outside smart contracts.
The biggest challenge for Sui is that it is attempting to disrupt an industry that is highly competitive. Today, there are tens of similar smart chains, which have their pros. Ethereum, the biggest chain in the world, has a leading market share in DeFi, NFTs, gaming, and the metaverse.
The other platforms that are more competitive in the industry are Solana, Aptos, Polkadot, Zilliqa, Cardano, and Tezos among others. Further, there are layer-2 networks that seek to scale Ethereum like Optimism, Polygon, and Arbitrum.
All these blockchains, including Mina, Near Protocol, and EOS, have a first-mover advantage that will be difficult to dislodge. Many of them also have multi-million dollar incentive funds that they use to incentivize developers.
History suggests that I am right. For one, while all these blockchains have better features, none of them has been able to out muzzle Ethereum. In DeFi, Ethereum has a total value locked (TVL) of over $64 billion while the rest have $30 billion. This shows that Ethereum is more trusted by developers.
What next for SUI prices?
Sui price jumped sharply on its first day and then nosedived. This is in line with how other new tokens trade. Historically, they tend to jump and then retreat as insiders and early investors exit their positions. We saw this price action with Arbitrum recently.
Therefore, I suspect that Sui will then bounce back as some investors start buying the dip and as the developers make new announcements like exchange listings. If this happens, Sui could bounce back to $2, which is about 50% above the current level. But you should be careful when investing in a highly illiquid token like this. As shown below, Aptos and Arbitrum initially crashed and then bounced back albeit slightly.
