SUI Network has received notice that there will be a well-organized shutdown of AlphaFi because of a misconfigured oracle for ALPHA that resulted in loans with less collateral and bad debt on AlphaLend. The process allows users to pay off their debts and withdraw their funds.
This comes at a time when the SUI price is still on the rise. At press time, SUI is trading at $1.17, with a market cap of $4.81 billion and daily trading volume of $1.78 billion. In addition, SUI has also risen by over 40% in the last seven days, indicating that the AlphaFi outage has occurred amid a rally in the SUI market.
AlphaFi Shutdown Follows ALPHA Oracle Issue
As stated by Sui, the issue occurred due to a misconfiguration regarding the ALPHA price oracle of AlphaFi. It resulted in undercollateralization of certain borrowings against the value of ALPHA tokens on the AlphaLend platform.
It resulted in bad debt and ultimately forced AlphaFi to start shutting down its business. The Sui Security Team played its role in identifying the issue, while the Sui Foundation played its part in resolving the issue and making sure that AlphaFi remains solvent.
AlphaFi has entered the maintenance phase. People are not able to create loans or deposit any funds, but people who were using AlphaFi prior to this update will still be able to repay their loans and withdraw their funds.
This incident also has an effect on those who used AlphaFi through Slush. According to Sui, withdrawals are available for these strategies, but some withdrawal delays have been eliminated.
SUI Price Holds Above Key Technical Levels
The recent breakout has once again put the focus on the technical structure of SUI. As mentioned by crypto analyst Crypto Patel, the token was able to break out of its multi-month descending structure to retake its key trendline.
Patel has noted $1.42 as one of the most crucial levels for the long-term trend. In his view, any weekly close above this level is an indication of a shift in the broader structure. Any inability to hold this level may see the token test its lower accumulation zone.
The most critical takeaway from this analysis is not only the targets expected but the significance of the $1.42 level. Breaking through this price may serve to reinforce the existing recovery pattern, while failing to do so will be a headwind for SUI.
Also Read | Hyperliquid Strategies Buys Another 494K HYPE Amid Whale Transfers
SUI Technical Indicators Show Strong Buying Activity
Additionally, the moving averages for SUI confirm that the recovery has accelerated. The 20-period EMA is trading above the 50-period EMA, while price is above the major EMAs that have been identified from the provided market information.
The RSI reading is above 70, which shows positive buying pressure but also indicates that the asset is overbought. It makes SUI vulnerable to short-term profit-taking or consolidation following an aggressive increase in price.
The level of trading has grown along with the rise in price. SUI Community noted that the total volume of trades of SUI within one day was $1.82 billion, a 30.5% increase from the previous one.
The increased volatility increases interest in the current recovery process, though the risk of AlphaFi shutdown creates another challenge for the Sui network.
AlphaFi Shutdown Adds DeFi Risk to Sui Ecosystem
The example of AlphaFi demonstrates the dangers that DeFi lending platforms might be exposed to if the oracles responsible for determining the prices of the assets involved are set up incorrectly. The matter is that in this particular instance, the incident was not caused by any reported wallet drain.
The timing for Sui is significant, considering the network’s native cryptocurrency has been experiencing an uptick in value, and activities on its blockchain have been high. AlphaLend had crossed the $100 million mark regarding the total amount of supplies on the platform before shutting down.
However, the steps undertaken by Sui Foundation have ensured that the debt is not turned into a loss for the users, as per Sui. Meanwhile, the incident brings attention to oracle technology and its risks in decentralized finance applications.
As far as the SUI price is concerned, the key concern at the moment is whether this current upward movement can be maintained amid the process of gradual withdrawal of AlphaFi from the network. The technical point of $1.42 mentioned above has taken on much significance at the moment.
Also Read | Solana Token Supercycle: Explosive Positive Breakout in 2026
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
Be the first to comment