After the launch of the mainnet on May 3, the SUI token fell into a deep downtrend, which has caused the price to drop by more than 87%. Low user numbers and poor on-chain data have severely clouded the outlook. However, a few days ago, there was a surprise that gave a big boost to the SUI price.
The SUI network made waves in the crypto space by surpassing its competitor Solana in daily transactions. However, with a sudden record of 29 million transactions in 24 hours, SUI has left many crypto enthusiasts questioning the validity and sustainability of this sudden surge.
Renowned analyst and crypto whale Andrew Kang, 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 pumping their numbers up. Chart looks good, market does not seem to be discerning about validity of transactions. Fake it til you make it.
Is SUI Still Worth Buying?
As Kang argues, the question is: Are the numbers legitimate and can drive a sustainable upward trend, or will the hype quickly die down because of fake numbers?
The recent surge in transactions can be primarily attributed to the introduction of the on-chain game, “Sui 8192.” Developed by the team behind the wallet provider, Ethos Wallet, this casual game has captured the attention of users with its gameplay reminiscent of the classic puzzle game “2048.”
Each move within the game triggers a transaction, resulting in the state of the game being recorded on the blockchain. With the integration of a pre-approval mechanism in Ethos Wallet, players can optimize their gameplay experience by setting a token amount before each game.
It’s Important to know that the SUI Foundation has allocated $5 million to further stimulate activity within the game, offering players the opportunity to earn rewards in the form of SUI tokens by competing against others or completing tasks. However, this could call into question the sustainability of this increase in transaction activity.
Perhaps the game is only experiencing a short hype at the moment because players want to grab the free tokens. Once the marketing budget is exhausted, the hype could quickly be over. SUI traders and investors should therefore be cautious.
Prior to this transaction surge, the project had been marred by negative headlines, including allegations of suspicious token movements, concerns about venture capital influence, and opaque tokenomics. These controversies have left some investors wary of the project’s long-term prospects.
However, as stated by Kang, the SUI chart looks promising at the moment. The price has broken out of the downward trend that existed since the mainnet launch. The bulls also managed to defend the 23.6 Fibonacci retracement level in a retest. Currently, the price is contending with the 38.2% retracement level at $0.76. If it manages to break above this resistance, $0.84 and $0.92 could be the next price target.
Featured image from Boxmining, chart from TradingView.com