Ethena (ENA) Is Experiencing Significant Selling Pressure

Ethena (ENA) is experiencing significant selling pressure, which has left traders and investors nervous. A large part of this bearish sentiment can be attributed to the recent ENA sell-off

Ethena (ENA) has been facing significant selling pressure, leaving traders and investors in a state of nervousness. A large part of this bearish sentiment can be attributed to the recent ENA sell-off of $10.35 million ENA by Amber Group, a notable market maker.

The giant sale happened on Binance and has raised concerns of even greater short-term volatility, as a sudden spike in supply can push the price down. What’s more alarming is that some of these tokens were bought only two weeks ago at an average price of $0.3979, which implies that Amber Group’s choice to sell now is a sign that it may not be bullish on the short-term potential of ENA.

Massive ENA Token Unlocks Could Make Things Worse

While the market maker ENA sell-off has exerted downward pressure on ENA, Ethena’s tokenomics are further contributing to the pressure. On March 5th, there was a massive 2.06 billion ENA tokens unlocked, which is about 13.9% of the total supply.

Additional ENA token unlocks will occur on April 2nd with another 94.19 million and on April 5th with a large 171.85 million.

With all of this new supply to the market, it is easy to see why traders may feel cautious. Higher liquidity can, in some cases, attract investors, but the fear of price drops could keep traders sidelined.

As ENA weighs this uncertain phase, technicals will be an essential component to see where the price may go next. Let’s take a look at the charts to see where the price of ENA may be heading.

Price Analysis and ENA Price Prediction

The trading session on 21st March started with a strong downtrend channel indicating bearish sentiments in the market. At 00:40 UTC, a death cross formed on the MACD line solidifying the bearish sentiment and continuing the downtrend channel.

By 04:00 UTC, a golden cross appeared raising the prices slightly but the overall price fall continued to happen. The prices entered a new key resistance and support level of $0.3710 and 0.3570. The price stabilized at the key support level when a golden cross formed at 16:30 UTC.

The prices still struggle to rise following the long downtrend channel and strong bearish momentum.

At 21:55 UTC, a strong selling pressure developed following two death crosses on the MACD leading to a breakout on the key support level.

By the start of the new trading day on 22nd March, at 00:05 UTC a golden cross formed aligning with the RSI overbought signal pushing for another breakout to rise above the support level. However, the sell side continues to restrict in major upswing.

By 04:00 UTC, a significant buying pressure developed when a clear golden cross formed on the MACD line resulting in the breakout. The prices re-enter the previous key resistance and support level of $0.3710 and 0.3570. The prices starting rising again steadily with caution post the breakout.

Conclusion: Can ENA Overcome the Selling Pressure?

Ethena (ENA) is currently facing an instance of extreme bearish pressure. This negativity is mainly driven by Amber Group’s liquidation of $10.35 million worth of ENA and massive unlocks of tokens. The influx of new supply has led traders to slow buying and increase short-term volatility.

Although higher liquidity can draw in investors, selling pressure has impeded any significant recovery in ENA’s price. This event is confirmed by the technical analysis, as the price continues to move within a downtrend channel after many recovery attempts.

Though golden crosses on the MACD have spurred short rallies for ENA, selling pressure has foiled this momentum multiple times, especially along key support and resistance levels of $0.3710 and $0.3570.

Therefore, any bullish price action above these levels would be vital for ENA to recover; however, the market is presently experiencing uncertainty, with sellers in control. The ENA price prediction indicates that traders should monitor confirmation from signals like MACD and RSI to ascertain the subsequent course of action.