Ethena (ENA) unlocks 2.07B tokens worth $740.71M, flooding the market with new supply

Ethena (ENA) triggered a significant event in the crypto market by unlocking 2.07 billion ENA tokens, valued at approximately $740.71 million.

Ethena (ENA) has triggered a significant event in the crypto market with the unlocking of 2.07 billion ENA tokens, valued at approximately $740.71 million. This massive increase in circulating supply, 39.17% of the total supply, has brought forth crucial questions about market stability, price volatility, and investor sentiment.

The unlocking event not only flooded the market with new tokens but also brought uncertainty to ENA’s price action moving forward.

Following the token unlock, ENA initially saw a slight uptick of 1.89%, climbing from $0.4020 to $0.4096. However, the rally was short-lived, and the price quickly retraced to $0.3790, highlighting the profit-taking pressure and heightened selling activity.

This immediate drop showcases how the market reacted to the sudden supply increase. Usually, large unlocks result in price declines as many holders try to secure profits, especially when significant tokens enter the market.

In tandem, large investors moved substantial amounts of ENA to major exchanges. A total of 125 million ENA (around $45 million) was transferred to Binance, Bybit, and FalconX. This large-scale deposit could translate to more selling pressure as these investors might capitalize on short-term gains or prepare for a potential downturn.

Historically, token unlocks tend to exert pressure on prices due to the added supply. In ENA’s case, the sudden introduction of such a large amount of tokens raises concerns about whether demand can keep pace with the increased supply.

If market demand fails to fully absorb the influx of new tokens, it could lead to further downside, with some analysts predicting a potential drop to as low as $0.30. This would be a significant correction from its current levels.

Conversely, if buying interest is strong enough, the market could stabilize, and ENA’s price could recover. In this case, a price range near $0.4200 could be a possible target, especially if demand from long-term investors or institutions remains substantial.

The ability of the market to digest the newly unlocked tokens will be crucial in determining whether ENA can regain bullish momentum.

Further complicating the market outlook for ENA is its current volatility. The Volatility Index stands at 0.3769, indicating moderate market fluctuations.

Meanwhile, the Cumulative Volume Delta (CVD) has been trending downwards, signaling that sellers have more control over the market. The CVD decreased from -108.707M to -107.359M and later to -107.07M, suggesting that selling pressure continues to outpace buying activity.

This bearish CVD trend indicates that traders may be hesitant to enter positions, as the market appears to be largely driven by those taking profits or liquidating positions. If this trend continues, ENA could see further downside. However, if the CVD turns positive, it could signal a reversal in market sentiment, and the price could bounce back toward $0.4200.

Another critical factor influencing ENA’s price is its performance in the futures market. The CME Futures Open Interest (OI) for ENA surged to $120,000 on March 6, 2025, coinciding with a rise in Bitcoin’s price to $65,000. Open Interest increased steadily from $20,000 to $100,000 over the preceding weeks.

This rise indicates a growing appetite for leveraged positions. Typically, high open interest can amplify market volatility, as it signifies increased exposure to price swings, with traders betting on future price moves.

If the OI remains elevated, it could fuel a bullish scenario for ENA, potentially pushing its price toward $0.4500. However, if open interest drops below $50,000, it might trigger liquidations and bring ENA’s price down to $0.3800 or lower. The movement of open interest will be crucial in determining short-term price action.

The unlock of 2.07 billion ENA tokens has brought significant supply-side pressure to the market, and investor reactions are already evident in the price movements and trading volumes. While the short-term outlook remains volatile, the longer-term stability of ENA will depend on the market’s ability to handle this increased supply and whether demand continues to rise.

Traders should closely monitor the CVD, volatility indicators, and open interest in the futures market to gauge the likelihood of a price reversal or continued downward movement.