Ethena’s ENA token jump fell by 15% in the last 24 hours. This happened because Ethena’s stablecoin USD has now become the third largest stablecoin in the market, on the Ethereum blockchain.
But this week another ENA token is going to be unlocked, which can take the price down. Due to this, investors can be a little cautious.
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ENA Token jumps Price Soars on Ecosystem
ENA jumped by almost 21% on Sunday and briefly went as high as $0.624, but then came back to around $0.60.
Trading volume also increased by 35% to $1.15 billion, indicating more activity in the market. Ethena is now the 6th largest protocol in the DeFi world, with TVL reaching $9.48 billion.
The month of July was very strong for Ethena. The platform recorded $2.96 billion USD inflows, while in June there were just $47 million. Platform fees have also more than doubled from $19.96 million to $36.5 million, which shows user activity and growth.
USDe Spikes, Driving ENA Momentum
One of the main reasons for ENA’s strong rally is its fast-growing synthetic stablecoin, USDe.
According to DeFiLlama, since mid-July, the supply of USDe on Ethereum has increased by 75%, taking its market cap to $9.3 billion.
Due to this growth, USDe has overtaken First Digital USD and is now in third place after Tether and Circle’s USDC.
Massive Token Threatens Volatility
As much bullish momentum continues, next week could bring some volatility. Ethena will unlock $101.87 million worth of ENA tokens this week, according to data from CryptoRank.
Crypto analyst Ali Martinez reported that 250 million ENA tokens have been transferred to exchanges in the past 2 weeks possibly a signal of profit-taking.
On top of that, famous investor Arthur Hayes also sold 7.76 million ENA tokens last week, with a total value of around $4.62 million, according to Lookonchain.
What’s Next For ENA Price?
On the weekly chart, the ENA chart is currently forming a double bottom pattern which is a bullish signal. But to confirm this pattern, the token needs to reach the $1.20 level. This level is not just the neckline but also the upper boundary of a downtrend that has been going on for several months.
On the daily chart, the indicators are showing positive momentum. The MACD is currently in the negative zone, but its signal looks weak. On the other hand, the RSI has reached 63 and is moving towards the overbought zone. If the RSI crosses above the signal line, it is also considered a bullish sign.
In addition, the 50-day and 200-day moving averages are close to a Golden Cross and this formation often signals a price breakout. If this cross occurs, the price of ENA could go even higher.
Why This Matters
Ethena’s rapid growth and upcoming token unlock could have a big impact on the short-term price. This situation will also show how much investors trust and interest there is in new stablecoin-based DeFi protocols.
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People Also Ask:
What is Ethena?
Ethena ENA token jump is a decentralized finance protocol built on the Ethereum blockchain. Its main goal is to provide a synthetic stablecoin USDe that is scalable and price stable without the help of a traditional bank system.
What is the ENA token?
ENA is the native governance token of the Ethena protocol. ENA holders can vote on important protocol decisions such as upgrades and system settings. The token can also be used for rewards or incentives within the ecosystem, depending on Ethena’s future governance rules.
How is Ethena different from other stablecoin protocols?
The most unique point of Ethena is its crypto-native design. Other stablecoins like USDT or USDC are backed by fiat, while USDe uses decentralized collateral and automated hedging strategies. This means it does not rely on any centralized company, and follows the core values of DeFi transparency and decentralization.
