Ethena [ENA] could erase recent gains – Here’s why

Ethena has broken down from an ascending channel pattern, with growing selling pressure driving the decline.
Both technical indicators and on-chain metrics confirmed widespread selling activity.

As a seasoned crypto investor with a knack for spotting trends and interpreting market signals, I’ve seen my fair share of bull runs and bear markets. The recent decline of Ethena [ENA] has caught my attention, given its break down from an ascending channel pattern and the growing selling pressure driving the decline.

More recently, Ethena [ENA] surpassed the $1 threshold – a milestone not seen since June 2024 – however, it couldn’t maintain this level and dipped below it again since then.

At the current reporting, the day’s decrease amounted to 6.26%. This has resulted in a reduced weekly growth for ENA, standing at 12.85%. The analysis of market sentiment indicates that the value of this asset may drop even more.

Ascending channel breakdown: Not a good sign

Lately, ENA has fallen out of its upward trending channel due to a shift in the market’s mood becoming pessimistic. This has led to increased selling over buying actions.

A rising trendline, or ascending channel, is established when the price fluctuates between a specific upward trajectory. However, it may eventually drop below the lower limit, and in many cases, it moves back towards the starting position of the channel.

For ENA, a temporary halt in its downward trend might occur near the $0.8888 mark, offering a chance to reevaluate whether we could anticipate a recovery or if the descent may continue.

Should the current trend continue, my attention is drawn towards two crucial support levels that could potentially impact ENA’s performance: $0.6852 and $0.5826. A downward shift to either of these points would result in a significant reversal, effectively erasing more than half the progress ENA made during its ascent to $1.477.

More losses for ENA?

As a crypto investor, I’m closely watching ENA, and it seems the “death cross” has appeared on the MACD indicator recently. This potentially signals further losses might be in store for this cryptocurrency.

The MACD, or Moving Average Convergence Divergence, is a method used to monitor the shifting dynamics of two moving averages associated with a financial asset’s price movement.

In simpler terms, a ‘death cross’ happens when a shorter duration trendline (represented by the blue line in MACD) falls beneath a longer trendline (symbolized by the orange signal line). This suggests that there might be a shift towards decreasing bullish sentiment or bearish momentum in the market.

Reinforcing the pessimistic stance, the Relative Strength Index (RSI), which measures the magnitude of recent price changes to determine overbought or oversold conditions, has fallen below the 50-neutral level, currently at 44.58. This indicates that market sellers are preferring other cryptocurrencies over ENA, potentially signaling a downtrend.

If these trends persist, ENA’s price is likely to continue falling below its current level.

Sellers flood the market

At the current moment, there were fewer buyers taking long positions compared to sellers with short positions, which was indicated by a long-to-short ratio of 0.8847.

When the ratio dips below 1, as is the case with ENA at present, it often indicates a potential continuation of the asset’s price drop.

Read Ethena’s [ENA] Price Prediction 2024–2025

It’s clear that the current market downturn has resulted in significant losses for long traders, totaling around $1.19 million over the past 24 hours, compared to smaller losses of about $95,400 for short traders, according to Coinglass.

If the shorter end of the market is showing smaller gains, it seems like buyers are at a disadvantage, implying that the price of ENA might keep falling further.

2024-12-09 18:47

Ascending channel breakdown: Not a good sign

More losses for ENA?

Sellers flood the market

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