- Ethena, at press time, appeared ready for a bullish shift after the price broke past the 200-day SMA
- Whale activity was affected after large ENA transactions surged by more than 400% from $26M to $142M
Ethena (ENA) defied the bearish trends across the broader cryptocurrency market after gaining by 5% in 24 hours. At press time, ENA was trading at $0.36, with a market capitalization of $1.02 billion.
Following these gains, ENA might be ready for a full-fledged reversal from its bearish trends. On its four-hour chart, for instance, the altcoin seemed to be trading within a descending parallel channel – A sign of a prolonged downtrend.
ENA could make a bullish breakout from this channel after flipping the resistance at the 200-day Simple Moving Average (SMA). The move above this resistance revealed that the uptrend has been gaining strength lately.
(Source: Tradingview)
For ENA to sustain this breakout, it needs high buying volumes. The Relative Strength Index underlined the same, with its uptrend suggesting that market bulls have been gaining ground.
However, given that the RSI had a neutral value of 50, more buying pressure may be needed to sustain the uptrend. This buying activity could come from whales or large traders.
Whale activity could fuel ENA’s uptrend
Ethena whales appeared to be one of the catalysts behind its latest price surge. In fact, data from IntoTheBlock showed that within the last 24 hours, the number of large ENA transactions exceeding $100,000 rose from 23 to 128.
Large transaction volumes also hiked from $26 million to $142 million. This represented an over 400% hike in whale activity within 24 hours.
(Source: IntoTheBlock)
A hike in whale activity is often a catalyst for price volatility and bullish trends.
In terms of ownership, whales control 88% of ENA’s supply. Therefore, if this cohort becomes active, ENA is bound to make significant price moves.
Is Ethena undervalued?
Ethena dropped to an all-time low of $0.19 in September 2024, around five months after hitting an all-time high. ENA has since recovered from these record lows with an 87% price surge, but several metrics suggested that the altcoin is still undervalued.
For example – The Market Value to Realized Value (MVRV) ratio dropped gradually in the last six months. ENA’s MVRV ratio stood at 1.11 at press time, suggesting that the average trader is near the break-even point.
(Source: IntoTheBlock)
When fewer traders are profitable, it could result in reduced selling pressure and stabilized prices. Moreover, ENA being undervalued could create the ideal entry position for buyers.
Finally, the Network Value to Transaction (NVT) ratio also revealed a similar outlook. In the last two days, the NVT ratio dropped by 77%.
(Source: IntoTheBlock)
A dropping NVT ratio also implied that ENA’s price is not reflecting the network’s growth. This is a bullish indicator as healthy network activity is a catalyst for long-term price growth.
Rising whale activity around Ethena, alongside the dropping MVRV and NVT ratios, supported a bullish outlook. However, the market sentiment needs to flip positive to support a bullish breakout.
At press time, ENA’s crowd sentiment was negative, according to Market Prophit. This could hinder the rise in buying activity needed to support the uptrend.
