ENA Price Technical Analysis: Ethena Price Rally Driven by Strong Market Demand

Ethena price has risen by more than 20% in the last 24 hours to its highest level in four months as the market anticipates a revenue-sharing proposal.

The price of Ethena (ENA) has risen by more than 20% in the last 24 hours to reach its highest level in four months, as the market anticipates a proposal to share some of the protocol’s revenue with ENA holders.

The ENA token is used in Ethena’s synthetic dollar protocol on the Ethereum blockchain. Its price has been rising in anticipation of a governance decision that will directly impact ENA holders.

Wintermute Proposes Fee Switch for Ethena Holders

The latest Ethena price rally follows a proposal by Wintermute, a leading crypto market maker, to introduce a new fee-sharing model for Ethena’s governance token, ENA.

According to the proposal, some of the revenue generated by Ethena will be distributed to ENA holders, allowing them to benefit from the protocol’s growth.

Wintermute’s proposal argues that ENA holders currently lack sufficient financial incentives linked to the performance of Ethena’s price, which could lead to a divergence of interests between protocol participants and its performance.

To address this issue, Wintermute has proposed a revenue-sharing model, subject to certain conditions, such as a minimum circulating supply of USDe (Ethena’s stablecoin) and sustained revenue generation, before the model can be implemented.

The risk committee will consider these factors and decide on the possible implementation of the fee switch in the near future.

Ethena Price Rally Driven by Strong Market Demand

The announcement of the proposal has generated significant interest in ENA, leading to increased trading and price volatility.

In the last 24 hours, ENA’s trading volume has surged by 61% to reach $482 million, highlighting the market’s bullishness and demand for ENA.

Such a large increase in volume suggests that the rally is driven by more than just speculative trading.

Open interest for ENA also followed the same trend, surging by 8% according to data from Coinglass. When open interest increases during a price rally, it usually indicates new money entering the market as more traders open positions hoping for further gains.

ENA Price Technical Analysis

ENA is currently trading at $0.51, and some analysts have predicted that the price could rally as high as $1.00.

The current uptrend has seen ENA break through several key barriers. Notably, the upper Bollinger Band is acting as a strong buy signal.

If ENA can continue this momentum and maintain high trading volume, a breakout to the next higher resistance levels at or around $0.60 or $0.65 could be on the horizon.

Ethena’s market standing also appears to be strong, with a fully diluted market cap of around $5 billion and annualized revenue of about $150 million.

If Wintermute’s proposal is approved, the revenue-sharing model could make ENA holdings more valuable, potentially attracting more investors and driving the price up.

Moreover, technical indicators support the current rally. According to the technical analysis, the MACD indicator is positive, with the MACD line above the signal line, indicating a continuation of the buyers’ zone.

Similarly, the Chaikin Money Flow (CMF) is positive, suggesting an inflow of capital and increasing interest from traders in ENA.

The recent breakout from the long-term falling wedge pattern adds further strength to the bullish outlook. This pattern on the ENA price chart, from May to August, could be signaling a shift in trend from bearish to bullish.

After breaking out of this pattern in late August, the ENA price has been rallying, making higher lows and higher highs, both of which are bullish signals.

If the current market conditions continue, ENA could be set to challenge the psychological resistance level of $1.00 over the next few weeks.