SUI Price Drops After Market Debut Across Cryptocurrency Exchanges

Sui (SUI) has experienced a sharp decline in its price after its market debut across leading cryptocurrency exchanges. On May 5, the token was trading at $1.26 per token, a decrease of about 70% from its record high of approximately $4, which was established just two days prior on Binance.

SUI Maintains Overall Market Gains Despite Price Decline

Although SUI’s initial uptrend drew support from traders who view it as potentially more scalable than its rivals, the token’s sharp decline poses a concern. However, SUI maintains its overall market gains, up nearly 1,200% from its market debut. Interestingly, on other exchanges like Kraken, the token’s market top was $1.60 or lower, indicating that it was in “price discovery” mode after the launch.

Investment Rounds and Token Economics of SUI

Venture capitalists led by Andreessen Horowitz and FTX Ventures have invested $336 million in the Sui project via two investment rounds in 2021 and 2022. However, the project’s token economics show that it has allocated 14% of its 10 billion SUI supply to investors. Mysten Labs, SUI’s original contributor, has not yet revealed when it will distribute these tokens or any associated vesting schedule.

Furthermore, Mysten Labs repurchased the stake held by FTX Ventures, a subsidiary of the now-defunct FTX crypto exchange, in April 2023. It also took back the rights to buy SUI tokens previously held by FTX for approximately $96 million.

Concerns Over SUI’s Supply Schedule

Traders and analysts have shown their conviction in the Sui project’s goals to become an attractive blockchain alternative. However, there are also concerns about SUI’s supply schedule. The Sui Foundation plans to increase the SUI supply by approximately 15% by the end of 2023, which could prompt traders to wait for further price declines before entering the market.

From a short-term technical perspective, the SUI price faces interim sell-off pressure near $1.31. A pullback scenario could have the token eye $1.26 as its short-term downside target. Conversely, analysts see SUI rising toward $1.50 in May based on its decisive close above its descending trendline resistance.