Ethena has been struggling over the past day, slipping back toward the $0.32 range. The energy in the market has clearly shifted, and sellers are taking control.
There are a few important reasons contributing to the current decline in the ENA price, and these factors have emerged concurrently.
Token Unlocks Are Adding Pressure
One of the most significant factors behind the current decline is the latest token unlock. On November 5, more than 171 million ENA tokens were released into the market, representing approximately $55 million worth at current prices. This is not an isolated event; Ethena has monthly unlocks scheduled through 2027.
Whenever a large amount of new supply enters the market, investors begin to worry about dilution. Some recipients might choose to sell immediately, particularly core contributors or early investors who have finally gained liquidity.
This fear alone is sufficient to drive the ENA price lower as holders attempt to preempt the sell pressure. The market's reaction to the previous unlock in early October, which saw ENA drop by over 30%, has not been forgotten by traders.
The ENA Technicals Aren’t Helping Either
On the chart, the ENA price has recently fallen below several key support levels. The price is currently trading below important moving averages, which typically signals weakness.
Furthermore, it has broken below a crucial Fibonacci retracement level around $0.347, confirming that sellers continue to hold the upper hand.
Momentum indicators align with this observation. The Relative Strength Index (RSI) has slipped into oversold territory, indicating that the decline may be overextended. However, this does not guarantee an immediate rebound; ENA requires buyers to step in and demonstrate the significance of this support level.
Should the ENA price continue to decline, the next major zone to monitor is around $0.28. A breach below this area could trigger another substantial downward movement.
Weakness Across Altcoins Is Making It Worse for Ethena
The downside pressure on ENA is not occurring in isolation, as most altcoins are currently under pressure. The cryptocurrency market as a whole has experienced a decline of nearly 8% this week, while Bitcoin has shown more resilience. Investors are rotating into BTC as a safer asset during times of market uncertainty.
Trading volume for ENA has also decreased by nearly 30% over the past 24 hours. In scenarios with insufficient buyer interest, even minor sell-offs can accelerate rapidly, which is precisely what is being observed.
Consequently, even if Ethena's underlying fundamentals remain robust, the broader market sentiment is also contributing to its downward trend.
What Happens Next for ENA?
The outlook is not entirely negative. The ENA price is approaching levels where it has previously experienced bounces. If the token can sustain its position above $0.28 and stabilize, a recovery could materialize once market conditions improve.
The current oversold readings also suggest that sellers might be losing momentum. However, for the present, the situation is straightforward: new supply has entered the market, charts have broken lower support levels, and altcoins are facing widespread weakness. These combined factors explain Ethena's current price drop.
If confidence returns to the altcoin market, ENA has the potential for upward movement, but buyers will need to actively participate before any significant rebound can develop.