Ethena Price Recovers as Whales Step In Following Brief USDe Depeg
The price of Ethena faced continued pressure over the weekend after its stablecoin, USDe, temporarily lost its peg, leading to a spike in bullish liquidations.
Summary
- The Ethena price has experienced ongoing pressure in recent days.
- Developers assure that the USDe stablecoin is over-collateralized.
- Current technical analysis suggests a potential for further declines.
The Ethena (ENA) token was trading at $0.3670, reflecting a 156% increase from its lowest point on Friday. However, it still sits at approximately 60% of its peak value in September.
Whales Seize the ENA Price Drop
On Friday, Ethena’s price took a significant downturn, hitting an all-time low as the broader cryptocurrency market plummeted. The token was affected by a $226 million liquidation event as exchanges halted leveraged trading amid a heightened sell-off.
Data from third parties indicates that whale investors capitalized on the recent price decline, implying they anticipate a future rebound in ENA value. According to Nansen, whale holdings increased to 45.2 million tokens from a recent low of 39.19 million tokens on Friday.
Additional data reveals that the top 100 wallets increased their holdings to 13.76 billion, rising from a monthly low of 13.67 billion.
Whales likely made purchases following reports that confirmed the Ethena USDe stablecoin possesses adequate collateral despite losing its peg.
According to the developers, results from independent audits by firms such as Chainlink and HT Digital affirm that the USDe is over-collateralized by approximately $66 million.
The transparency data shows that the USDe stablecoin is supported by assets including Bitcoin, Ethereum, and liquid stablecoins, which are held by exchanges like Binance, Bybit, OKX, and Deribit.
Ethena consistently attracts attention, particularly as investors remember the collapse of Terra, which offered a stablecoin with double-digit yields and lost over $40 billion in 2022, tarnishing the reputation of other algorithmic stablecoins.
Technical Analysis of Ethena Price
The daily chart indicates that ENA’s price underwent a notable decline last week, triggered by the formation of a double-top pattern at $0.8538 and a neckline at $0.6060, marking its lowest level since August. Double-top patterns are common bearish indicators in technical analysis.
The token has dipped below both the 50-day and 200-day Exponential Moving Averages and has briefly fallen below this year’s low of $0.2221.
Consequently, the prevailing forecast for Ethena’s price appears bearish, with the initial target set at $0.2221. Another possibility is a dead-cat bounce, a brief recovery that may lead to further declines.