Ethena (ENA) experienced an impressive surge of over 140% in July, but upcoming token unlocks and whale activity raise concerns.
What Led to Ethena’s July Rally
Ethena's rally in July was fueled by improving market conditions, protocol growth, and interest from large holders. According to DeFiLlama, the protocol's total value locked (TVL) increased by 73%, positioning it as the sixth-largest DeFi platform globally. Moreover, its synthetic stablecoin, USDe, saw a substantial supply increase, surpassing $9.3 billion.
Upcoming Token Unlock
A large unlock of 171.88 million ENA tokens is set for August 5, representing about 2.7% of the current circulating supply, leading to concerns about potential price pressure. Token unlocks often result in additional sell-offs, particularly when market sentiment is positive.
ENA Price Analysis
As of writing, ENA is trading around $0.61. The current price structure indicates the formation of an ascending broadening wedge, which is interpreted as a bearish signal. A break below the $0.52 support level could lead to further declines, potentially down to $0.24.
In summary, despite Ethena's recent success, the looming token unlock and whale actions present risks to maintaining its gains.
