Ethena [ENA] Surges 36% – Will the Next $0.46 Target Break?

Having started trading six months ago at an initial coin offering price of $0.57, Ethena [ENA] quickly rose to $1.46 within the first week. Despite this strong start, the cryptocurrency has since encountered a bearish trend.

However, mid-September marked a turning point for ENA as it surpassed its previous resistance level, reaching $0.413 and securing a notable 36% increase in just one week.

As reported by CryptoCrypto, the next objective for ENA is to retest the $0.46 resistance, with the condition that the upward momentum is maintained.

New Proposals by Ethena

Ethereal Exchange has put forward a suggestion to incorporate its decentralized exchange (DEX) into Ethena’s hedging mechanism, generating excitement among investors. This proposal has already led to a 10% surge in ENA’s price over the last 24 hours.

If this integration proposal is accepted, holders of ENA will receive 15% of any future Ethereal governance token. This move aims to enable the Ethereal DEX to manage on-chain spot and derivative positions supporting USDe, Ethena’s proprietary stablecoin, which is anticipated to have a significant role in upcoming developments.

Interestingly, the majority of ENA holders find themselves in positions where they have incurred losses, accounting for about 85% of the total ENA holdings.

Analysts at CryptoCrypto noted that this high concentration indicates that most investors are currently in a loss-making position, possibly waiting for a market reversal or significant updates to drive up the token’s value.

While Ethena’s future roadmaps may enhance liquidity within the network, there are doubts whether they will be sufficient to trigger a sustained bullish rally. Unless…

Support from Major Holders

Following Bitcoin’s downturn in late August, Ethena experienced a similar decline, mainly influenced by hefty sell-offs from large holders.

Bulk holders, who constitute 85% of this group and control around 13.45 billion ENA collectively, have been consistently offloading portions of their holdings.

Yet, in the recent week, the outflows from these major holders have been steadily increasing, reaching approximately 12 million units just two days ago.

Exercise Caution

Over the past seven days, speculative trading activities in Ethena have been dominated by traders engaging in short selling of ENA.

During a similar scenario in early September, short positions tried to take control, causing Ethena to seek support around $0.19.

Despite the surge in short positions, they were unable to trigger a significant pullback, as the actions of whales mitigated much of the pressure, creating favorable conditions for a short squeeze to occur.

However, if the market gives in to downward pressure from Bitcoin and if major holders lose confidence in potential gains, an increase in short positions could threaten the ongoing rally, making the recent proposal less effective.

According to CryptoCrypto, closely monitoring the activities of major holders is vital for steering Ethena back towards its earlier resistance level at $0.46.