Cetus Protocol hack impacts sentiment, causing SUI price to halt below $4 resistance barrier.
SUI is currently trading at $3.62, marking a 1% decline over the past 24 hours, following the aftermath of the $223 million hack on the Cetus Protocol on May 22. This significant breach, one of the largest in the decentralized finance sector this year, has cast a long shadow over the Sui ecosystem, with concerns mounting about the network's decentralization and the stalling of bullish momentum.
Before the hack, SUI had surged over 60% within a month, reaching around $4.29 on May 12, with growing interest in real-world asset tokenization and new institutional partnerships driving its impressive rally. However, the hack triggered a sharp sell-off, leading to a near 14% drop in just a day, and SUI is now trading roughly 20% lower than its pre-hack levels, moving between $3.48 and $3.62.
The Cetus attack exploited flaws in the smart contracts using spoof tokens such as BULLA and MOJO to manipulate price feeds and deplete liquidity pools, with the SUI/USDC pool losing approximately $11 million. Trading was paused, and the total value locked on the Sui chain fell from $2.13 billion to $1.92 billion.
Despite the losses, Sui validators managed to freeze around $162 million of the stolen assets by blacklisting the attacker's wallet, preventing the majority of funds from exiting the network. However, this action has sparked debates about the extent of validators' power and the risks of centralization.
Cetus has requested a community vote to approve the recovery of the frozen assets, with the vote scheduled to end on June 3. If passed, the funds will be secured in a multisig trust account until they can be returned to affected users. Both Cetus and the Sui Foundation have pledged to cover compensation for users, with full restitution contingent on a successful vote.
In response to the market, Coinglass data shows an increase of nearly 40% in derivatives volume to $3.57 billion in the past day, indicative of increased interest from short-term volatility traders. Meanwhile, open interest has dropped 2.9% to $1.77 billion, suggesting that some traders may be pulling back or taking profits.
Technical indicators provide mixed signals, with the relative strength index remaining neutral around 50. Short-term momentum indicators point to a potential upside, but the moving average convergence divergence shows a bearish crossover, indicating downward pressure. Short-term moving averages signal ongoing bearish pressure, while longer-term indicators provide more bullish signals.
The 50-, 100-, and 200-day moving averages are all signaling buy opportunities, suggesting that, if SUI can weather the damage caused by the hack, it will likely continue on an upward trend. However, SUI remains stuck below the $4 resistance, and traders are closely watching to see if it can break through or if the fallout from the Cetus hack will continue to weigh on the market.
In other news, the Sui-based Haedal Protocol has suspended its haeVault feature following the Cetus exploit. The event, currently undergoing a community vote for asset recovery, is serving as a landmark test for decentralized crisis response and governance.
- The Sui-based Haedal Protocol paused its haeVault feature, following the recent Cetus Protocol hack, which is now being discussed as a significant test for decentralized crisis response and governance.
- Crypto finance experts observe a surge in derivatives volume for SUI, with Coinglass data indicating an increase of nearly 40% to $3.57 billion in the past day, possibly due to increased interest from short-term volatility traders.
- Additionally, wallet holders in the Sui ecosystem have been discussing the power of validators, as around $162 million of the stolen assets were frozen by blacklisting the attacker's wallet after the Cetus breach, which has sparked debates about risks of centralization within the technology.
