Wait for the dip? Identifying the next entry point for ENA traders
The $0.22-local supply zone has halted the altcoin's uptrend for now.
After forming a higher low of $0.135 on 14th September, Ethena [ENA] rallied by 71.14% to reach a local high of $0.231 on Sunday, 20th September.
Surprisingly, while Bitcoin [BTC] broke key resistance levels on Monday, ENA was relatively quiet, oscillating around the $0.215-level.
The DeFi protocol issues the synthetic stablecoin USDe, with ENA serving as the governance token. On Sunday, it was reported that the stablecoin market cap grew by $71.4 million from the five largest issues.
Ethena contributed to a $35.8 million in stablecoin market cap growth in 24 hours. Additionally, since 16th September, $90 million in ENA has been staked, with a total of nearly $1.26 billion in ENA locked up to earn yield.
These reports underline the confidence in the DeFi protocol. Investor sentiment can also be highlighted in the altcoin’s price action. Especially since the same has trended higher on the back of sustained demand.
ENA uptrend runs into an obstacle
After consolidating under $0.10 from June to August, Ethena bulls managed to drive a convincing rally above $0.14, a resistance level that stretched back to February.
In September, the price retested this level as support, and the buyers had enough ammunition to drive another rally just past $0.22.
The $0.22-$0.26 area had been a supply zone during January’s rally. That brief move trapped a lot of late buyers before the altcoin went into a nosedive on the price chart.
Therefore, there will be many holders whose ENA is only just returning to breakeven levels. Moreover, shorter-term holders who bought during or before the previous week’s rally would also be looking to take profits.
The sell pressure at the $0.22 supply zone likely won’t be overcome in one try. ENA might need time to consolidate lower before the bulls are ready to make the next impulse move higher.
Traders’ call to action – Wait for a pullback
At the time of writing, the nearest liquidity levels of note were $0.232, and to the south, $0.171, $0.178, and $0.188. In case of a pullback, it is likely that ENA will be drawn to the $0.171-$0.188-zone.
This area also marks the local highs from late August and has since been flipped to support, making a revisit a potential buying opportunity.
Final Summary
- USDe demand remains strong, and the ENA token has also seen spot demand in recent weeks.
- The $0.22-local supply zone has halted the altcoin’s uptrend for now, and a brief pullback towards $0.17 may be likely.
