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Market Analysis: Ethena’s Price Volatility and Potential Rebound

source-logo  coinedition.com 11 June 2024 13:57, UTC

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.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.