Ethena’s synthetic stablecoin, USDe, has demonstrated remarkable resilience despite recent market turbulence. While many assets suffered significant losses, USDe maintained its peg, with its market capitalization exceeding $6 billion. However, the outlook for Ethena’s native token, ENA, remains uncertain, with key bearish signals suggesting further downside risk for investors.
ENA Faces Strong Selling Pressure
ENA has seen a sharp decline of 6.5% in the past 24 hours, with its daily trading volume plummeting nearly 50%. The drop in volume signals weak buying conviction, indicating that traders are hesitant to step in despite some bidding at lower levels.
Adding to the bearish sentiment, upcoming token unlocks pose a significant challenge. Currently, nearly 8% of ENA’s total supply remains locked. As these tokens enter circulation in the coming months, selling pressure could intensify, further dampening the token’s price action.
Technical Indicators Paint a Bearish Picture
From a technical perspective, ENA’s market structure remains bearish, with a series of lower highs and lower lows over the past three weeks. The Accumulation/Distribution (A/D) indicator has been steadily declining since December, reflecting weak buying interest and highlighting the token’s vulnerability.
Despite this, key Fibonacci retracement levels offer potential support for a bullish reversal. The 61.8% and 78.6% retracement levels could provide temporary relief, while the $0.5 and $0.437 price levels serve as crucial support zones. The $0.5 level, in particular, aligns with a bullish order block from November, which previously triggered an uptrend.
Also Read: Ethena’s USDe Stable Amid Trade War Volatility, Market Cap Tops $6 Billion
What’s Next for ENA?
For traders looking for signs of a potential recovery, a breakout above $0.678 could flip the market structure bullishly, offering a more optimistic outlook. On the H4 chart, the $0.68 level is a critical short-term resistance. Conversely, a drop below $0.5 could pave the way for further downside, potentially testing the $0.437 support.
While some altcoins and Bitcoin (BTC) may recover as market conditions stabilize, ENA’s upcoming token unlocks present a unique challenge. Investors should remain cautious and monitor key technical levels closely.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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