SUI rallied 11% in just 24 hours, is it still a buy?

Following the mainnet launch on May 3rd, SUI token fell into a deep downtrend, which resulted in a price drop of over 87%. Low user numbers and poor on-chain data severely cloud the outlook. However, a few days back, a surprise happened which gave a big boost to the SUI price.

SUI Network created waves in the crypto sphere by overtaking its rival Solana in daily transactions. However, with a sudden record of 29 million transactions in 24 hours, SUI has made many crypto enthusiasts question the legitimacy and sustainability of this sudden surge.

Renowned analyst and crypto whale Andrew Kang, who is known for his insightful commentary, has raised concerns about the authenticity of these transactions, suggesting that SUI may be artificially inflating its numbers. Kang writes today:

Sui is increasing its numbers. The charts are looking good, the market is looking none the wiser about the validity of the transactions. fake it til you make it.

Is SUI still worth buying?

As Kang argues, the question is: are the numbers valid and can spur a sustainable upward trend, or will the hype quickly die out due to fake numbers?

The recent surge in transactions can be largely attributed to the introduction of the on-chain game, “Sui 8192”. Developed by the team behind wallet provider, Ethos Wallet, this casual game has caught the attention of users with its gameplay reminiscent of the classic puzzle game “2048”.

Each move within the game triggers a transaction, as a result of which the state of the game is recorded on the blockchain. With the integration of a pre-approval mechanism into Ethos Wallet, players can customize their gameplay experience by setting a token amount before each game.

It is important to note that the SUI Foundation has allocated $5 million to further encourage activity within the game, giving players the opportunity to earn rewards in the form of SUI tokens by competing against others or completing tasks. Is. However, this calls into question the sustainability of this increase in trading activity.

There is probably only a little movement in the game at the moment as players try to get free tokens. Once the marketing budget is exhausted, the promotion can end quickly. Hence SUI traders and investors should be cautious.

Prior to this transaction boom, the project was surrounded by negative headlines, including allegations of suspicious token movements, concerns about venture capital influence, and opaque tokennomics. These controversies have made some investors wary of the project’s long-term prospects.

value analysis

However, as Kang said, the SUI chart looks promising at the moment. The downward trend in prices since the mainnet launch has been broken. The bulls also managed to defend the 23.6 Fibonacci retracement level in a retest. Currently, the price is competing with the 38.2% retracement level at $0.76. If it manages to break this resistance, $0.84 and $0.92 could be the next price targets.

Featured Image from BoxMining, Chart from Tradingview.com