Ethena Price Declines Amid Whale Activity and Rising Exchange Balances
Ethena’s price has dropped consecutively for three days, falling to $0.95 as whales sold their tokens. With increased exchange balances and risk-averse sentiment in the crypto market, further declines appear likely. A technical analysis indicates potential targets below the current market price.
The price of Ethena (ENA) has experienced a significant decline, retracing for three consecutive days as both exchange balances increased and large holders, known as whales, liquidated their holdings. The ENA token fell to $0.95, dipping below the critical psychological threshold of $1 for the first time since December 20. This downturn is largely attributed to the prevailing risk-averse sentiment pervading the cryptocurrency market, affecting prices across various assets, including Bitcoin (BTC).
Revelations from on-chain data indicate substantial token sales by whales, with one notable transaction involving a whale transferring 11.6 million ENA tokens, valued at approximately $11 million, to Binance, the premier cryptocurrency exchange. Additionally, another transaction saw a different trader move ENA tokens worth $10.7 million to Binance. On December 26, Ethena whales collectively divested tokens totaling $30 million, occurring shortly after Arthur Hayes, the founder of Bitmex, sold part of his ENA holdings. Current reports show that Hayes retains 18,616 ENA coins, valued at approximately $17,458.
Simultaneously, the rising balance of tokens on exchanges continues to exert negative pressure on Ethena’s price, aligning with widespread bearish sentiment. In the past week alone, the number of tokens on exchanges surged by 5.82%, exceeding 730.27 million, while the proportion of total supply on exchanges increased to 4.87%, up by 0.27% from the previous week. Moreover, inflows into Ethena’s stablecoin, USDe, have stagnated. The coin currently maintains a market capitalization of $6 billion, reflecting a lack of robust demand.
From a technical standpoint, the price of Ethena appears poised for further declines, having established a head and shoulders pattern on the four-hour chart. This configuration includes a neckline situated at $0.8552, along with two shoulders and a head. Historically, such formations prompt notable downward momentum upon breaching the neckline. Furthermore, Ethena has retraced to the 38.2% Fibonacci level and fallen below the 50-period moving average, indicating additional bearish signals. A potential drop beneath the neckline could suggest a decline to approximately $0.5860, an area that indicates extreme oversold conditions.
The cryptocurrency market is experiencing a turbulent phase, with heightened volatility and fluctuations in asset values. The price movement of Ethena (ENA), a token in this sector, has captured attention as it recently slipped below the $1 threshold. This article highlights the factors contributing to this decline, particularly focusing on the behavior of major stakeholders (whales) and the shifting dynamics of exchange balances. Understanding these elements offers insights into the broader market’s psychological climate and trading patterns.
In summary, Ethena’s price reversal can primarily be attributed to significant sales by whales and an increase in token balances on exchanges, signaling bearish market sentiment. With key technical indicators such as the head and shoulders pattern and Fibonacci levels suggesting more potential downside, investors should remain vigilant. The current stagnation of demand for related stablecoins further underscores the challenges Ethena faces in maintaining price stability and growth.
Original Source: crypto.news
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