- Sui Network faces intense competition from layer 1 and layer 2 networks.
- SUI is being associated with new meme coins like Pepe and Keke.
- SUI insiders are likely distributing their tokens.
Sui price has moved sideways in the past few days as a somber mood has engulfed the cryptocurrency industry. The token, which exists on Ethereum’s network, was trading at $1 on Friday, lower than its all-time high of $2. Sui still has a market cap of over $558 million, making it one of the biggest cryptocurrencies in the world.
Reasons to avoid Sui token
There are several reasons why I believe that Sui is not a good investment. First, Sui is a new blockchain in an industry that has become highly competitive. It describes itself as a decentralized permissionless smart contract platform.
It is built on Diem’s architecture, meaning that developers can use it to build decentralized applications in industries like gaming and decentralized finance (DeFi). The challenge is that this industry is highly competitive today.
Sui is competing with other layer 1 networks like Ethereum, Solana, Cardano, and Polkadot among others. Also, it is competing with layer 2 networks like Optimism, Arbitrum, and Polygon. All these platforms have projects already, which means it will struggle to gain market share since the industry is maturing.
We have seen this happen with other new smart contract platforms recently. For example, Aptos, another Diem platform, has also struggled to gain critical mass.
Second, Sui was launched in the same period as the meme coin season was getting underway. Some of the top meme coins that are becoming popular are Pepe, Mrs Pepe, Ben, and Milady Meme Coin (LADYS). Therefore, while Sui is not a meme coin, many traders are putting it in that category.
As a result, since I expect many of these meme coins to implode, there is a likelihood that it too will crash hard if this happens.
Finally, I suspect that many insiders and early investors, including venture capital firms will start dumping their stakes. This is important since Sui Network boasted a valuation of over $2 billion before its mainnet launch. I suspect that these holders will now attempt to exit their positions to at least recoup their initial investments.
Sui price prediction
It is relatively difficult to make a good Sui Network price prediction using technical analysis because there is no enough data. On the 30-minute chart, we see that the SUI token has been in a slow downward trend in the past few days. Notably, the volume traded has dropped in the past three days.
Therefore, in the near term, SUI price will depend on that of Bitcoin. If BTC sell-off continues, SUI will fall as well. In the longer term, however, I suspect that the token will underperform other mainstream coins.
