Ethena (ENA) has experienced a significant 18% drop in price over the last 24 hours, pushing its market cap below the $3 billion mark. Despite this, ENA remains one of the top 50 largest cryptocurrencies by market capitalization. The price drop has been fueled by persistent bearish sentiment, and technical indicators are pointing to more potential losses ahead unless a major shift in market conditions occurs.

Technical Indicators Show Bearish Momentum

As of now, the primary technical indicators for ENA are indicating bearish pressure, though some signs hint at the potential for a price recovery. Among the most notable indicators is the Relative Strength Index (RSI), which has dropped to 26.4, its lowest point in the past five months. The RSI measures the speed and magnitude of price movements, and when it falls below 30, it signals that an asset may be oversold and could see a price rebound. This oversold condition could suggest that the heavy selling might be overdone, allowing room for a potential recovery if buyer interest returns.

However, the drop in RSI also reflects the ongoing weakness in investor sentiment, suggesting that the price may continue to face downward pressure in the short term. The RSI has sharply fallen from 79.9 on January 3 to its current value of 26.4, highlighting the dominance of sellers over the last few days.

Chaikin Money Flow Indicates Easing Selling Pressure

The Chaikin Money Flow (CMF), which measures capital flow into and out of an asset, is currently at -0.19. While this figure remains negative, signaling that selling pressure still dominates, it has shown slight improvement from the recent low of -0.25. This recovery suggests that capital outflows may be slowing, providing a glimmer of hope for stabilization in the price of Ethena.

Nonetheless, the CMF remains below zero, indicating that negative sentiment prevails. A stronger move towards positive territory would be required to signal renewed buying interest and a potential shift in market sentiment.

Death Cross Could Lead to Further Declines

Ethena’s exponential moving averages (EMAs) are currently showing a bearish pattern, with the short-term moving averages trending downward. If this pattern continues, ENA could form a death cross, which occurs when short-term EMAs cross below long-term EMAs. This technical signal is often associated with intensified selling pressure and suggests that the downtrend could continue.

If a death cross is confirmed, the price of ENA could test its immediate support level at $0.89. A break below this level would likely lead to further downside, with $0.75 emerging as the next key support zone. This would represent a 21.8% decline from its current price.

Can ENA Break Resistance at $1.01?

Despite the bearish trend, there remains a potential for a recovery if ENA can break through key resistance levels. Traders are closely watching the $1.01 resistance level, as a successful break above this point could signal a shift in momentum. If ENA manages to establish a bullish trend, it could move toward higher targets such as $1.12 or even $1.31.

For any meaningful recovery to take hold, ENA would need to see a sustained increase in buying pressure, which would push the price past current resistance levels. However, without a significant change in sentiment, the ongoing bearish trend could continue to weigh heavily on the price.

Conclusion: What’s Next for Ethena?

Ethena is at a critical crossroads, with bearish momentum prevailing despite some technical indicators suggesting the possibility of a rebound. The price of ENA remains under pressure, and a death cross could trigger further declines toward $0.75. However, if buying interest picks up, ENA could recover and potentially target the $1.01 resistance level.

With market conditions remaining volatile, investors should closely monitor support at $0.89 and resistance at $1.01 to gauge the next potential move for Ethena. The coming days will be crucial in determining whether the cryptocurrency can reverse its downward trajectory or face more significant losses.