Ethena Price Plunges 57% Amid Weakening Crypto Sentiment

The Ethena price has crashed by 57% from its highest level in December as sentiment in the crypto industry weakened. This decline has mirrored that of most altcoins, including Ethereum, which has dropped by over 32% from its December peak, and Cardano, which has fallen by 45%.

Ethena’s Network Performance Remains Strong

Despite the ongoing token crash, Ethena’s network continues to perform well. The total value locked in the network, or the USDe stablecoin market cap, has surged to over $6.12 billion, nearing its all-time high of $6.2 billion. USDe has now become the fourth-largest stablecoin in the industry, trailing only Tether, USD Coin, and USDS.

USDe’s 427,000 holders earn an annual return of approximately 10%, generated from arbitrage opportunities within the network. This highlights the potential for stablecoins to provide stable returns in a volatile market.

Ethena Price Technicals Suggest a Comeback

The daily chart shows that ENA formed a double-top pattern at $1.3065 between December and January. This pattern, characterized by two peaks and a neckline, at $0.8470 in this case, explains why ENA has plunged nearly 60% from its highest level this year.

Ethena has also dropped below the 50-day moving average, signaling that bears remain in control. However, on the positive side, ENA is slowly forming a falling wedge pattern. The upper boundary of this pattern connects the highest swings since January, while the lower trendline links the lowest points since December.

With the two lines nearing their confluence level, a bullish breakout may be imminent. A strong breakout could push the price higher, potentially retesting the double-top level at $1.3062, around 130% above the current price.

Key Takeaways and Tips for Investors

Here are some key takeaways and tips for investors:

  • Monitor the falling wedge pattern: A breakout above the upper trendline could signal a bullish reversal.
  • Watch the RSI levels: If the RSI drops below 30, it may indicate oversold conditions and a potential rebound.
  • Set a stop-loss**: A drop below the key support at $0.4425 would invalidate the bullish scenario.

Historically, assets tend to rebound upon reaching oversold conditions.

For more news and updates on the crypto market, visit Global Crypto News. Stay informed and stay ahead in the world of cryptocurrencies and investing.