Ethena (ENA)’s 57.46% Price Surge Sparks User Interest, But Will It Last?

Nicholas Otieno -

As Bitcoin approaches undergoing its fourth halving event, a newly introduced coin built on the Ethereum blockchain has unveiled itself as a strong competitor in the crypto ecosystem following its recent achievements.

The Ethena (ENA) token has gained some serious traction in a short time, with more than a $1.9 billion market cap currently. Many crypto users are interested in a crypto review of this new token. Let's explore why this token is making rapid inroads into the crypto market.

Why is Ethena (ENA) price trading higher?    

Ethena has been up 57.46% for the last seven days. At press time, the token is trading at $1.37, up 2.95% from the last 24 hours. Its market cap of $1.9 billion ranks it the 57th largest cryptocurrency in the entire crypto ecosystem.

With a price rise of 58.00% in the last seven days, ENA has outperformed the global crypto market, which is up 3.80% currently.

The price rise signals that users are flocking to the Ethena ecosystem to take advantage of existing investment opportunities. Last week, on April 2, Ethena Lab, a DeFi protocol that provides the $1.3 billion yield-earning stablecoin USDe to users, rolled out a new governance token, called ENA token, to enhance its Ethena protocol’s operations.

During that time, Ethena Lab announced an airdrop campaign offering active participants free ENA tokens. As a result, many users have been drawn in by the incredible airdrop of 750 million ENA tokens available on the Ethena network.

A few days ago, Blockchain analytics firm Lookonchain shared analytic reports indicating that three wallets withdrew 11.9 million ENA ($15.23 million) from Binance exchange to stake the funds into ENA tokens.

Following the launch of the airdrop, ENA surged more than 8% to trade at about $0.64, with a market cap of around $500 million. The token witnessed its lowest price of $0.5324 on April 02, 2024, when it was launched 10 days ago. The current price is 155.62% higher than the all-time low price. Meanwhile, the token recorded its highest price of $1.40 yesterday April 9, 2024. Its current price is 2.55% lower than the all-time high price.

Ethena (ENA) price prediction

To better understand whether the current bullish momentum would lead to a further surge in the coin’s price, let's take an in-depth look at Ethena's state.

ENA’s RSI is currently at 50.91, signaling that the token will likely experience some correction or short-term downtrend.

The MACD line turned up from above zero, indicating that ENA is currently in a bullish trend. However, the more interesting thing is that the MACD line crossed from above to below the signal line, suggesting that a bearish momentum is looming.

If an ENA bear market rally were to occur, the token would fall to hold the $1.139 support level in the next few days. Likewise, if the cryptocurrency loses buyer interest further, its value will decline to the support level of $0.977.

Alternatively, if the potential downtrend momentum is invalided, the token would try to retest or surpass its previous all-time high of $1.40.

What is Ethena (ENA)?

Ethena is a synthetic currency protocol running on top of the Ethereum blockchain that aims to provide digital asset users with stablecoin savings based on blockchain. The protocol's stablecoin, USDe, is designed to peg its value to the US dollar by staking Ethereum for a specific period.

Stablecoins are one of the major applications of blockchain protocols, currently accounting for about 7% of the market share of all cryptocurrencies with a total market cap of $140 billion. Today, the stablecoin landscape is led by USDT, which accounts for 70% of the market share, followed by USDC, BUSD, DAI, and others. USDe, a new entrant in the stablecoin market, attracted $400MM in TVL one week after its launch and is currently providing a 35% yield at current rates.

Early this month, Ethena Labs, the company behind Ethena protocol, launched ENA token to serve as the native token within the Ethena ecosystem. Major use cases of the ENA token include the following:

  • The ENA token allows holders to participate in the governance processes of the Ethena protocol, like voting on proposals about the platform’s direction, updates, and developments. By holding ENA tokens, users can make decisions affecting the protocol’s future.
  • The ENA token is used to reward users in the Ethena ecosystem. This includes rewards for contributing to the protocol’s network security and overall operations, participating in staking mechanisms, and liquidity provision.
  • ENA also serves as a utility token in the Ethena ecosystem. Customers can use the token to pay for services within the ecosystem, access certain features, and even use it as a medium of exchange for transactions carried out within the Ethena network. Users can buy ENA tokens on cryptocurrency exchanges like Binance, Kucoin, Bitget, etc.

Conclusion

Ethena (ENA) shows strong potential for gains this year thanks to its innovative models and enthusiastic communities.

Although the coin has the potential to turn into the next big thing, it still has to prove that it can attract adequate developers to build on top of its technology.