When ENA's Funding Rate Goes Negative, Is It Time to Buy or Just Cry?

It appears ENA’s Funding Rates have taken a nosedive to -42%, which is a bit like finding a hole in your pocket just when you need to pay for a pint.
While the influx of short positions suggests traders are feeling as optimistic as a cat in a room full of rocking chairs, an unexpected uptrend could lead to forced buying. Yes, forced. Like a bad date.

At the time of writing, Ethena [ENA] was trading at $0.715, having plummeted 14% in the last 24 hours. This decline has extended the altcoin’s bearish streak to a staggering 21% over the past week. If this keeps up, we might need to start a support group for sad altcoins.

Now, this downtrend has created a rather peculiar situation in the futures market, with ENA’s Funding Rates plummeting to -42%. This suggests that sellers are betting on further declines, which is a bit like betting on a three-legged horse in a race. Spoiler alert: it’s not going to end well.

Interestingly, these negative rates mean that traders who are taking long positions on ENA are being paid by exchanges to keep their positions. It’s like being paid to hold onto a hot potato—eventually, someone’s going to get burned.

Now, while the influx of short positions might seem bearish, it could lead to a short squeeze scenario. If ENA suddenly decides to pull a rabbit out of its hat and triggers a short liquidation event, the forced closure of these positions could lead to a buying frenzy. Think of it as a surprise party, but instead of cake, there’s a price rally.

Despite this glimmer of hope, ENA’s daily chart suggests that bears are still in control, probably sipping tea and discussing their plans for world domination.

Analyzing Ethena’s Descending Parallel Pattern

ENA has been trading within a descending parallel pattern on its daily chart, which is a fancy way of saying it’s been on a downward spiral. At the time of writing, ENA had breached the midline of this pattern, and if it drops below the lower trendline, we might as well start writing its obituary.

The price decline seems to be fueled by selling pressure after the Relative Strength Index (RSI) dropped to 35. This RSI is at its lowest level since early September, which is like finding out your favorite band has broken up—devastating.

The negative On-Balance-Volume (OBV) indicator also shows that traders are not buying the dip, as selling pressure is outweighing the buying pressure. It’s like trying to fill a bathtub with the plug out—pointless.

This indicates that ENA is in a strong downtrend that could lead to further price declines unless it pulls a miraculous reversal. Think of it as a soap opera where the hero must overcome insurmountable odds to win back the love of their life.

For a bullish reversal to occur, ENA needs to break the resistance level at the 0.5 Fibonacci level ($1.017). A breakout from the upper trendline could stir gains toward $1.31, which would be a plot twist worthy of a bestseller.

Daily Active Addresses Drop to a Two-Month Low

Besides a return of buyers, the other factor that could aid an uptrend for ENA is an upsurge in network activity. However, at press time, usage on the network was on a decline, which could exert further downward pressure. It’s like trying to inflate a balloon with a hole in it—good luck with that!

Read Ethena [ENA] Price Prediction 2025-26

According to Santiment, daily active addresses on the Ethena network have dropped to 1,031, the lowest level in two months. This indicates reduced interest in the altcoin, leading to negative market sentiment. It

2025-01-28 12:11

When ENA’s Funding Rate Goes Negative, Is It Time to Buy or Just Cry?

Analyzing Ethena’s Descending Parallel Pattern

Daily Active Addresses Drop to a Two-Month Low

Read More