Over the last 24 hours, Ethena [ENA] experienced a 6.5% decline, with its daily trading volume nearly halved. Despite some bidding activity following losses on February 3rd, the decrease in volume signals a lack of strong market sentiment.
The bearish indicators do not stop there. The impending token unlocks in the upcoming months are expected to further amplify the existing selling pressure on ENA. The fact that close to 8% of the total ENA supply remains locked spells trouble for investors.
Despite recent market fluctuations, the synthetic stablecoin USDe associated with ENA has effectively maintained its peg, with its market capitalization surpassing $6 billion. This development bodes well for the overall protocol.
Ethena Price Dynamics Unveiled…
The prevailing market trend exhibits a distinctly bearish tone characterized by a consistent series of lower highs and lower lows over the past three weeks. To the bulls’ relief, potential salvation lies at the 61.8% and 78.6% Fibonacci retracement levels.
The Accumulation/Distribution (A/D) indicator has demonstrated a continuous descent since December. The lack of a steady influx of buying volume reflects a notable absence of bullish confidence. This sheds light on the weakness observed in ENA during the recent market liquidation phase.
While certain altcoins, as well as Bitcoin [BTC], may anticipate a rebound once market uncertainty dissipates, ENA’s journey to recovery might be hindered by the impending token unlocks.
Traders should not be disheartened by this outlook. Key support levels to monitor include $0.5 and $0.437, with the former representing a bullish order block from November that kickstarted the upward momentum.
A breach above the recent lower high at $0.678 could signal a bullish shift in the market structure on the daily chart. Additionally, the H4 chart highlights the significance of the $0.68 threshold as a crucial short-term resistance level.
Conversely, a drop below $0.5 could present a short-selling opportunity, potentially leading to a test of the $0.437 mark.
Disclaimer: The content provided is the writer’s opinion and should not be construed as financial, investment, trading, or any other form of advice.