Exchange inflow of 300 million ENA tokens sends Ethena lower

Traders Union
All News
Crypto
Ethena drops 6.79% to $0.0804 today

Highlights

A governance proposal enforces a 50% lockup on airdropped ENA and triggers token buybacks and burns to restrict circulating supply.
Despite these supply controls, over 300 million ENA deposited to exchanges in the past month heightens immediate sell pressure.
Technicals remain bearish with ENA trading near support at $0.0772, indicators oversold, and traders expecting continued consolidation or further downside.

Supply pressure builds as token lockups offset large exchange inflows

A recent governance proposal mandated that 50% of airdropped ENA be locked, with associated token buybacks and burns designed to limit the circulating supply and directly impact liquidity, according to CoinStats. While this measure may help counterbalance immediate selling by restricting available tokens, it occurs alongside the deposit of more than 300 million ENA tokens into exchanges in the past month, boosting market-side supply and intensifying potential sell pressure, as En Bloomingbit reported citing Glassnode. Additional developments include Janus Henderson's strategic investment in ENA and intent to allocate treasury cash into USDe as well as potential exchange-traded product distribution, alongside an anticipated fee switch aiming to introduce revenue sharing through buybacks and staker rewards.

Oversold readings persist as momentum weakens below resistance

On the technical front, ENA/USD is trading below the 20-period and 50-period moving averages on the hourly chart, and remains well under the longer-term 200-period moving average. Immediate resistance is defined by the Ichimoku Kijun at $0.0845, while support is clustered near $0.0772. Relative Strength Index (RSI), Stochastic RSI, and Commodity Channel Index (CCI) all indicate oversold conditions, suggesting stretched downside but no momentum reversal. Momentum readings from the Moving Average Convergence Divergence (MACD) and Average Directional Index (ADX) remain weak and biased to the downside, while Bull/Bear Power (BBP) confirms that sellers dominate short-term flows. The Awesome Oscillator does not supply further directional guidance.

Downside risk dominates as consolidation meets volatile swings

Over the next two to three trading days, price action is expected to consolidate within the $0.0772–$0.0852 corridor as typical volatility persists. The scenario with the highest probability is further downside, with limited prospects for an upward move. If the upper boundary at $0.0845 is breached, a short-term bullish swing could materialize, whereas failure to defend $0.0772 support would likely result in continued declines.

Viktoras Karapetjanc, analyst at Traders Union, sees the latest governance lockup and buyback measures as a proactive response to sell-side pressures from increased exchange deposits. He notes Janus Henderson’s involvement and the upcoming fee switch as positive signals for long-term institutional adoption and sustainable returns. However, ongoing sell pressure from the added token supply could cap near-term upside. The expert believes that while the broader outlook is supported by fundamentals, tactical caution is still warranted until selling flows moderate. "If ENA can stabilize above $0.0772 and investors absorb the new supply, I expect sentiment and positioning to shift constructively in the sessions ahead."

Earlier, analysts noted that persistent selling pressure kept Ethena locked in a broadly cautious technical posture despite growing on-chain activity. The current environment reinforces this downside risk, making it crucial for traders to monitor the sustainability of recent tokenomics changes and any reactions near the $0.0845 resistance and $0.0772 support as volatility remains elevated.

Source of Data: ENA Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.