Ethena [ENA] token recently broke out of a descending channel pattern, sparking optimism among investors.
Ethena [ENA] token broke out of a descending channel pattern, sparking optimism among investors. At the time of writing, the altcoin was valued at $0.3583, following a 3.44% decline on the charts.
ENA’s market capitalization stood at $1.89 billion, with a 24-hour trading volume of $135.5 million.
Price action analysis – Is ENA poised for a rally or a retreat?
ENA’s price had been in a phase of consolidation, before a breakout from the descending channel. This breakout created a new price action structure for the altcoin. With the price now testing support at $0.35, and resistance at around $0.47, the market is still uncertain.
If ENA manages to hold above the support at $0.35, it could target the resistance zones at $0.47 and possibly, challenge higher levels such as $0.48, $0.68 and $1.00.
On the other hand, if the price fails to maintain support at $0.35, ENA could test lower support levels at $0.26 – Signaling a potential price retreat.
Source: TradingView
On-chain signals – Will the data drive the price up or down?
On-chain analysis from IntoTheBlock painted a rather bearish picture for ENA. Despite the breakout, the net network growth highlighted a decline of 0.83% over the last seven days. This signaled a drop in activity.
Additionally, the “in the money” metric flashed a change of -0.80%. This suggested that a significant portion of ENA holders are currently at a loss.
While concentration was slightly positive at 0.13%, large transactions were largely bearish, with a huge -6.06% drop in the last seven days. This signaled more selling pressure in the market.
Taken together, these on-chain signals indicated that the token could face significant hurdles despite its latest technical breakout.
Source: IntoTheBlock
ENA Open Interest and liquidations
Open interest in ENA rose by 3.38%, climbing to $345.78 million to underline higher market participation, according to Coinglass. However, liquidation data revealed that long positions are being liquidated more than shorts.
In the last 24 hours, there was $29.62k in long liquidations versus $6.42k in shorts. This imbalance fuels price pressure downwards. But once these liquidations are cleared, the market may rebound.
For a sustained rally, ENA needs to break resistance levels around $0.47 and $0.48.
Source: Coinglass
Can ENA sustain its breakout?
Although ENA’s latest breakout from the descending channel sparked optimism for a price surge, bearish on-chain signals and support levels signaled that the token may face challenges. If ENA can hold above the support at $0.35 and push past the resistance at $0.47, it might see a sustained rally towards higher price targets, such as $0.48, $0.68, and even $1.00.
However, without breaking through these critical levels, ENA could struggle to maintain any upward momentum. As the price testing key levels, and on-chain signals are bearish, it remains to be seen whether ENA can capitalize on its breakout.
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