Ethena (ENA) has recently captured the attention of traders and investors with its breakout from a descending channel pattern. At the time of writing, ENA was priced at $0.3583 after a 3.44% decline. While the breakout generated excitement, the altcoin’s price is still testing crucial support levels, leaving market participants uncertain about its potential for sustained upward movement.

Price Action: Can ENA Maintain Momentum?

ENA’s recent breakout from the descending channel marked a shift in its price action, creating new dynamics for the altcoin. The price is now hovering near $0.3583, with a critical support level at $0.35. If ENA can hold above this support, it could target resistance levels around $0.47 and potentially push higher to levels such as $0.48 and even $1.00.

However, failure to maintain support at the $0.35 level could lead to a decline, with the next major support zone around $0.26. If the price falls below this level, it may signal a retreat in the market and cause further weakness in ENA’s price action.

In summary, the $0.35 support is a key level to watch. If ENA can maintain this level and push past resistance, it could see further gains. Conversely, breaking below $0.35 could trigger further downside movement.

On-Chain Signals: Bearish Outlook

While ENA’s price action suggests potential for growth, the on-chain data paints a different picture. Recent data indicates that network growth has declined by 0.83%, signaling a drop in activity. The “in the money” metric also showed a change of -0.80%, meaning many ENA holders are currently at a loss. This is a concerning signal, as it suggests that investor sentiment may not be as positive as the breakout implies.

Additionally, large transactions were largely bearish, with a significant drop of -6.06%. This suggests increased selling pressure, which could weigh heavily on the price in the short term. Although the concentration metric was slightly positive at 0.13%, the overall on-chain indicators point to a lack of strong demand, raising doubts about ENA’s ability to maintain upward momentum.

Liquidation Data: Rising Open Interest, But Downward Pressure

On a more positive note, ENA’s open interest has increased by 3.38%, reaching $345.78 million, indicating higher market participation. This suggests that more traders are engaging with the asset, which could lead to increased volatility and trading volume.

However, the liquidation data tells a different story. Long positions are being liquidated at a higher rate than shorts, with $29.62k in long liquidations compared to just $6.42k in short liquidations. This indicates that market participants are more inclined to exit their long positions, creating downward pressure on the price. While this may cause short-term bearish momentum, it also suggests that once these liquidations are cleared, the market could experience a rebound.

Resistance Levels: Key to a Sustained Rally

For ENA to see a sustained rally, it must first break through key resistance levels around $0.47 and $0.48. If ENA can maintain its momentum and surpass these levels, it could test even higher price points. However, failure to breach these resistance zones would likely result in the altcoin struggling to maintain its upward momentum, trapping it in a consolidation phase.

Conclusion: Can ENA Sustain Its Breakout?

ENA’s recent breakout from a descending channel was a promising development, but the altcoin faces multiple challenges that could limit its upside potential. Bearish on-chain signals and support levels suggest that ENA could struggle to maintain its current price action without breaking through key resistance levels. Traders and investors should closely monitor the $0.35 support and the $0.47 resistance levels in the coming days. If ENA can hold above $0.35 and surpass resistance at $0.47, it may continue its upward movement. However, without overcoming these critical levels, ENA could experience a period of consolidation or even a price retreat. The next few weeks will be crucial in determining the future direction of ENA.