The price of Ethena continued its downward trend even after the developers allocated funds to Blackrock’s BUIDL asset this week. The ENA coin dropped to a low of $0.3385 on Thursday, marking its lowest level since November 5 of last year. It has slipped by over 74% from its highest level this year.
ENA Price Dips After BUIDL Allocation
The main Ethena news was that the developers allocated $200 million to BUIDL, the yield-bearing tokenized fund by Blackrock. After this allocation, the fund crossed the important $1 billion milestone, making it the biggest tokenized fund in the industry.
Ethena made the deposit to back up USDtb, which now has over $540 million in supply and is also backed by Tether (USDT) and USD Coin (USDC). USDtb, according to CoinMarketCap, has a market cap exceeding $74 million.
Ethena also manages the popular USDe stablecoin, which has attracted over 519,000 holders and has a total value locked (TVL) of $6 billion. This stablecoin has led many analysts to compare it with Terra, the company that collapsed in 2022.
The comparison arises mainly because USDe is an algorithmic stablecoin not backed by fixed assets like fiat currency. Instead, it generates its returns algorithmically through the concept of cross market arbitrage.
Ethena is now one of the most profitable entities in the crypto industry. According to TokenTerminal, it has generated over $65 million in fees this year, outpacing BNB Chain, Morpho, Base, and GMX.
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Ethena Price Analysis
The daily chart indicates that the ENA price peaked at $1.3046, forming a double-top pattern with a neckline at $0.8420. It has now crashed below that support and moved significantly below the 50-day and 100-day Exponential Moving Averages (EMA). That is a sign that bears remain in control for now.
Oscillators such as the MACD and the Relative Strength Index (RSI) have continued their decline. Additionally, the Average Directional Index (ADX) has been declining over the past few days, indicating that the downtrend may be losing momentum.
Signs suggest that the Ethena price has formed a descending channel. A break below the lower boundary of this channel could indicate further downside, with the next point to watch being at $0.20, the lowest level in 2024. The bearish perspective will become invalid if the ENA price exceeds the 50-day moving average.
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