Market Analysis: Ethena’s Price Volatility and Potential Rebound

Ethena (ENA) experienced a bearish turn in the last 24 hours after bullish momentum failed to break through the intraday high of $0.8196. Bears seized control of the market, pushing the price down to an intraday low of $0.738, where it found temporary support.

At press time, ENA’s price was down 7%, trading at $0.7407, which aligned with an overall downward trend in the digital currency market, down by 2.85% to $2.47T in market cap. This downward movement is accompanied by a substantial increase in trading volume, indicating heightened market activity.

ENA/USD 24-hour price chart (source: CoinMarketCap)

During the dip, the 24-hour trading volume for Ethena surged by 79.50% to $174.19 million while the market capitalization of ENA witnessed a decline of 7.70% to $1.13 billion. This suggests that while trading activity increased, the overall market valuation decreased, possibly due to investors selling off their holdings amid price declines.

ENA/USD Technical Analysis

The Bollinger Bands on the ENA charts show significant insights into price volatility and potential future movements. The upper Bollinger Band, currently at $0.8804, and the middle band, at $0.8147, suggest that these levels could serve as resistance points if a price rebound occurs.

Conversely, the lower Bollinger Band, at $0.7489, has acted as a support level. If this support breaks, it could lead to further downward trends, possibly reaching the next psychological support level at $0.7000.

ENA/USD 4-hour price chart (source: TradingView)

The Relative Strength Index (RSI) for ENA is currently deep into the oversold territory at 23.31, which suggests that the asset may be undervalued. Such a low RSI often precedes a potential rebound, as traders might see it as a buying opportunity. However, the Money Flow Index (MFI) is at 55.53, indicating a more neutral market sentiment but leaning towards a bearish outlook given the price declines.

Derivatives Market Data and Sentiment Analysis

The derivatives market data for Ethna shows a mixed sentiment. While the overall long/short ratio is 0.8577, indicating a predominance of short positions over long ones, the sentiment among top traders on Binance presents a contrasting bullish outlook with a long/short ratio of 3.0048. This divergence in sentiment may suggest uncertainty in the market, with differing opinions on the future price direction of ENA.

Source: Coinglass

Moreover, the ‘Rekt’ data, which tracks losses due to liquidated positions, shows substantial losses, primarily on the long side, totaling $733.83K in the last 24 hours. This indicates that the swift downturn caught many traders expecting a price increase.

Concurrently, ENA’s derivatives trading volume increased 79.50% to $174.19 million. Despite this surge, open interest fell 5.68% to $149.17 million. This decline in open interest, alongside increased trading volume, suggests that traders might be closing positions rather than opening new ones, which could indicate a lack of confidence in the immediate upward potential of ENA’s price trend.