Galaxy Digital has caused quite a stir over its mega selloff of Ethena ($ENA) crypto. The latest move saw the firm deposit the remaining 4.46 million $ENA tokens. This is worth $4.92 million, which was deposited to Binance. This deposit comes at the end of a monumental offloading effort over the past 29 hours.
In sum, we saw Galaxy offload the entire 10.85 million $ENA tokens. It was at an average sale price of $1.144 and approximately a $2.37 million profit, or a 23.5% return.
This isn’t an isolated selloff. However, that’s part of an activity pattern that includes at least three major whales depositing 25.81 million $ENA tokens. These were worth approximately $30.43 million, to centralised exchanges Binance and Bybit over the last two days. Speculation that large deposits could be coordinated exits or portfolio restructuring by key players has caused massive volatility in the $ENA market.
Market Reaction and ENA’s Double-Digit Decline
In reaction to these large-scale selloffs, we see $ENA’s value drop dramatically. The token’s price has dropped by over 15% in the last 24 hours to trade below the psychological $1.00 mark, dropping to $0.994 at the time of writing.
The market cap of Ethena has dropped to $3.01 billion from $3.51 billion, down by 14.27% in one day. $ENA is currently in a dire situation after this sharp downturn, which has left market confidence shaken by fears of more selling pressure.
In addition, there is more to learn from $ENA’s spiked trading activity regarding the market’s rash activities.
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Traders reacting to the price drop spiked a massive 53.29%, with a 24-hour trading volume of $679.39 million. Despite this increased volume, it really hasn’t done anything to stabilise the price as whales and institutions continue to sell off.
The bearish outlook is compounded by a negative trend. Ethena’s fully diluted valuation (FDV) fell to $14.9 billion and its Total Value Locked (TVL) to $5.89 billion. With a market cap-to-TVL ratio of 0.511, $ENA is under pressure, leading to an ever-increasing disconnection from the fundamentals.
Ethena Crypto Technical Analysis: The Struggle Between Support and Resistance
The Ethena crypto rice chart pulled from some major cryptocurrency exchanges in the past few days sheds light on terrible times for the token.
On the four-hour chart, $ENA was seen to follow a sharp downward trajectory. In late December, $ENA rejected the critical resistance zone around $1.30. Since then, the selloffs over the past two days have hurled the token on a bout of sustained decline, fueling further bearish momentum.
$ENA currently tests a key support zone at the $0.90 – $0.95 range. It is vital for the token, as a failure to hold could mean more declines, targeting the next support at around $0.80.
The good news is that any recovery runs into strong resistance at $1.10 and $1.30, which are both psychological and technical points for this token.
The Money Flow Index (MFI) shows the oversold zone at 18.39. As such, buyers may step in and squeeze this piece of discounted pricing with a short-term relief rally for $ENA. But overall market sentiment is still bearish, and any rebound may be short-lived unless/ until sell pressure from institutional buyers is over.
