Ethena [ENA] could erase recent gains – Here’s why

• Ethena has broken down from an ascending channel pattern, with growing selling pressure driving the decline.
• Both technical indicators and on-chain metrics confirmed widespread selling activity.

Ethena [ENA] recently crossed the $1 mark—a level it last reached in June 2024—but failed to sustain its position and has since dropped below it.

The daily decline was 6.26% at press time, reducing ENA’s weekly gain to 12.85%. Sentiment indicators suggested that the asset could fall further.

Ascending channel breakdown: Not a good sign

ENA recently broke down from an ascending channel as market sentiment turned bearish, resulting in more selling than buying activity.

An ascending channel forms when price moves within a defined upward range but eventually breaks below the lower boundary, often retracing to the starting point of the channel.

For ENA, the decline could pause around the $0.8888 level, providing an opportunity to reassess for either a potential bounce or a continued drop.

If the decline persists, two key support zones come into focus: $0.6852 and $0.5826. A drop to either of these levels would erase over half the gains ENA achieved during its climb to $1.477.

Source: Trading View

More losses for ENA?

ENA could face additional losses as the “death cross” formed on the Moving Average Convergence Divergence (MACD) indicator at the time of writing.

The MACD is a trend-following momentum tool that tracks the relationship between two moving averages of an asset’s price.

A death cross occurs when the short-term moving average (blue MACD line) crosses below the long-term moving average (orange signal line), indicating potential bearish momentum in the market.

Adding to the bearish outlook, the Relative Strength Index (RSI) has dropped below the neutral 50 mark and currently sits at 44.58. This suggests that market bears are selling ENA in favor of other cryptocurrencies.

Source: Trading View

If these trends persist, ENA’s price is likely to continue falling below its current level.

Sellers flood the market

There were more sellers (short positions) than buyers (long positions) in the market at press time, as reflected by the long-to-short ratio of 0.8847.

When this ratio falls below 1—such as with ENA at the time of writing—it typically points to further price decline for the asset.

Read Ethena’s [ENA] Price Prediction 2024–2025

This trend is evident in the recent market losses. Over the past 24 hours, long traders have collectively lost approximately $1.19 million, while short traders have experienced a smaller loss of $95,400, per  Coinglass.

Given that the short side has incurred less loss, the market appears to be favoring sellers, suggesting that ENA is likely to continue its downward trend.