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Analysis

Ethena’s $0.36 resistance looms – But will a correction spoil things?

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The swift price surge on Ethena was accompanied by a short-term bearish divergence, which could result in a minor dip.
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Ethena's $0.36 resistance looms - But will a correction spoil things?
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  • Ethena did not yet possess a bullish swing structure on the 1-day chart.
  • The swift gains came alongside a BTC surge beyond $100k, casting doubts on organic demand.

Ethena [ENA] has been trading within a descending channel since March. The swift Bitcoin [BTC] surge past $100k saw ENA post 27% gains for the day at press time, and the trading session has not yet closed.

The trading volume also picked up on the day. The heightened volume and sizeable gains meant that the channel highs were the next price target. It was possible that Ethena would see a short-term price dip.

ENA: Enough momentum for a breakout?

ENA 1-day Chart

Source: ENA/USDT on TradingView

The technical indicators were leaning in favor of the bulls on the 1-day timeframe. The OBV saw a minor dip over the past two weeks as Ethena fell from $0.365 to $0.256.

The MFI also slumped following the losses of the past week.

Yet, the gains within the past 24 hours were accompanied by an uptick on the OBV and the MFI.

If this can be sustained over a period of a week or two, ENA would have realistic chances of breaking out beyond the channel highs. At press time, the resistance region to watch was the $0.355-$0.365 area.

Ethena 1-Hour Chart

Source: ENA/USDT on TradingView

Zooming in on the 1-hour chart, a bearish divergence between the price and the MFI indicator was seen. This showed that the short-term upward momentum has overextended the market and that a correction was likely to occur.

Such a correction could see an ENA price dip to the $0.318 or the $0.313 levels, which were support levels in the lower timeframes.

Ethena Liquidation Heatmap

Source: Coinglass

The liquidation heatmap data of the past month showed a cluster of liquidity that remained untested overhead.

A particularly dense cluster of liquidation levels was at $0.343, marking it as a price target in the coming days.

The $0.36 level was also a noticeable magnetic zone and a feasible price target. Traders already in long positions can consider taking profits around the $0.36 region, since it lined up well with the channel highs of ENA.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

 

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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