Against the backdrop of a generally bearish market for digital currencies, Ethena (ENA) managed to buck the trend with a notable 5% increase in value over a 24-hour period. As of the latest data available, ENA was exchanging hands at $0.36, commanding a market capitalization of $1.02 billion.
With the recent positive momentum, there are indications that ENA could be on the verge of a significant shift away from its bearish trajectory. A close analysis of its price action reveals that the altcoin appears to be trading within a descending parallel channel on its four-hour chart, signaling an extended period of downward movement.
A potential bullish breakout for ENA could materialize by surpassing the resistance barrier at the 200-day Simple Moving Average (SMA). The breach of this resistance level indicates a strengthening uptrend in recent times.
To sustain this breakout, ENA would require substantial buying pressure. The Relative Strength Index (RSI) corroborates this need, as its upward movement suggests increasing dominance by market bulls.
Albeit the RSI currently stands at a neutral value of 50, further buying impetus is likely essential to maintain the uptrend, potentially coming from significant players such as whales or large traders.
Large Traders’ Transactions Point to Potential ENA Uptrend
The recent surge in Ethena’s price could be attributed in part to the heightened activity of whales in the market. Data provided by IntoTheBlock highlights a notable escalation in large ENA transactions exceeding $100,000, soaring from 23 to 128 within a 24-hour timeframe.
A substantial spike in transaction volumes, from $26 million to $142 million, represents a significant increase of over 400% in whale involvement over the same period.
An uptick in whale activity often serves as a catalyst for heightened price volatility and favorable trends.
With whales reportedly controlling 88% of ENA’s total supply, any noteworthy activity on their part is anticipated to trigger substantial price fluctuations in the token’s value.
Assessing Ethena’s Market Position
In September 2024, Ethena plummeted to an all-time low of $0.19, a mere five months subsequent to reaching its peak price. Since then, ENA has staged a recovery, witnessing an 87% surge in value, but various metrics hint at the token’s ongoing undervaluation.
For instance, the Market Value to Realized Value (MVRV) ratio has seen a gradual decline over the past half-year. Currently, ENA’s MVRV ratio stands at 1.11, suggesting that the average trader is hovering close to the breakeven point.
When fewer traders are enjoying profitable positions, selling pressure typically abates, helping to stabilize prices. Furthermore, an undervalued status for ENA can present an attractive entry opportunity for potential buyers.
Additionally, the Network Value to Transaction (NVT) ratio paints a similar picture. In the last 48 hours, the NVT ratio has plummeted by 77%.
A declining NVT ratio indicates a disconnect between ENA’s price and the network’s activity level. This mismatch is viewed as a promising signal since robust network engagement often propels sustained price appreciation in the long run.
With rising whale activity surrounding Ethena, coupled with diminishing MVRV and NVT ratios, an optimistic outlook is supported. Yet, a shift towards positive market sentiment is imperative to spur a bullish breakout.
Presently, crowd sentiment towards ENA remains negative as per Market Prophit data. This prevailing sentiment could potentially impede the necessary surge in buying interest required to uphold the current uptrend.