Ethena [ENA] rallied to a local high of $0.12 on Wednesday, 04 March. An AMBCrypto report had detailed the swift surge in prices and the commensurate increase in Open Interest that signaled short-term bullishness.
The high trading volume on the day was also noted, but the longer-term bearish structure can be expected to prevail. Over the past 48 hours, the sellers regained control of the market too.
At the time of writing, ENA was 15% below the $0.12 local high water mark. Based on the evidence at hand, it would seem that a deeper drawdown was likely.
Ethena buyers cannot catch a break!
Source: ENA/USDT on TradingView
Any respite the buyers got over the past 8 months has lasted only a week or two, at best. Since topping out at around $0.8, Ethena prices have been falling since August. They fell below the $0.21 support in mid-January. At press time, the price was just above $0.1.
This represented a 50% drawdown in five weeks. It was a warning to altcoin investors that losing major support levels can lead to quick losses.
The Directional Movement Index has shown a strong downtrend on the weekly chart since October. The MFI has been falling lower, with the A/D making new lows too. Together, they highlighted the absolute control bears have enjoyed in recent months.
What next for ENA traders?
Source: ENA/USDT on TradingView
A bullish divergence with the momentum indicator led to a price bounce to $0.12. The aforementioned report had highlighted the longer-term trend and the liquidation cluster at $0.12 as a short-term price magnet.
The Fibonacci levels showed that the 78.6% level at $0.123 was not tested before the rejection. This may be another sign that sellers were in control and the market was firmly bearish. The technical indicators on this timeframe agreed as well.
The next target for ENA is the $0.085 extension level to the south.
Final Summary
- Ethena’s long-term price action was bearish, and the short-term bounce reached its target and faced rejection.
- A drop below $0.1 may be imminent, with a fall of 7%-15% likely over the next week too.
