Ethena (ENA) Price Remains at $0.79 Support Amidst USDe Growth, Indicating Possible Breakout
In a significant move for the cryptocurrency market, Ethena Labs GmbH has announced a substantial investment of $530 million from StablecoinX Assets Inc. and TLGY Acquisition Corp. This investment is expected to accelerate the integration of USDe, Ethena's stablecoin, across Hyperliquid's trading products.
At the time of writing, ENA, the native token of Ethena Labs, was trading at around $0.79, marking a 6.25% increase in the last 24 hours. This surge in price comes after ENA broke out of a diagonal resistance trendline that had been capping price action since mid-August.
The investment has also led to a significant short squeeze, with more than $500,000 worth of short positions being liquidated in the last 24 hours. This short squeeze has forced buybacks, adding upward momentum to ENA's price. In fact, this buyback mechanism has absorbed nearly 14% of ENA's circulating market cap in cash.
The daily charts show a cup-and-handle pattern, suggesting potential upside targets of $1.00 to $1.25. If ENA manages to hold above the $0.79 support and clear the resistance convincingly, it may reclaim its August highs and test the symbolic $1 mark.
Retail and mid-tier buyers appear to be offsetting part of the pressure, maintaining strong market participation. However, whales have reportedly sold over 140 million ENA, creating persistent supply pressure. Interestingly, whale wallets linked to large holders have transferred over 34 million ENA into Binance over the past two weeks.
CryptoQuant, a popular crypto analytical platform, has warned of a potential short-term distribution amid high volume and FOMO (Fear of Missing Out). Despite this, the institutions backing Ethena Labs are optimistic about the future of the Ethena stablecoin ecosystem.
USDe, Ethena's stablecoin, currently boasts a market capitalization of $12.8 billion, making it the third-largest stablecoin globally, behind only USDT and USDC. The treasury operates under a daily buyback schedule, purchasing $5 million or $10 million worth of ENA depending on the price.
This investment is part of a broader strategy to strengthen the Ethena stablecoin ecosystem and prepare for a merger and listing on Nasdaq under the ticker "USDE". The goal is to consolidate their position in stablecoin treasury solutions.
With this significant investment and strategic partnership, the future of Ethena Labs and USDe looks promising, as they continue to integrate across various trading platforms and strengthen their position in the stablecoin market.
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