Ethena (ENA), the rising crypto token, is under significant selloff pressure, with recent transactions creating uncertainty for its price trajectory. While ENA had been showing some bullish potential, large-scale selloffs and upcoming token unlocks have left many traders concerned about the token’s short-term future.

The Selloff by World Liberty Financial (WLFI)

One of the primary catalysts for the recent downturn in Ethena’s price is a large selloff linked to World Liberty Financial (WLFI), a company associated with Donald Trump. WLFI recently unloaded 184,000 ENA tokens, worth about $69,000. The move raised alarms in the crypto market, as large selloffs can signal a lack of confidence in an asset and often result in negative sentiment.

On-chain data from Arkham Intelligence reveals that these ENA tokens passed through several wallets before ultimately being converted into Wrapped Bitcoin (WBTC), suggesting that WLFI may have liquidated the tokens as part of a broader strategy to move out of ENA. This transaction has some traders concerned that more selling could follow, adding additional downward pressure on ENA’s price.

Amber Group’s Influence

Another factor contributing to the selloff is the actions of the Amber Group, a well-known market maker in the crypto space. The group recently sold $10 million worth of ENA tokens on Binance, compounding the bearish sentiment that had already emerged following WLFI’s move. These large transactions have contributed to a growing sense of unease in the market, causing many traders to reconsider their positions in ENA.

Upcoming Token Unlocks Add to Volatility

Adding fuel to the fire are the upcoming token unlocks that are scheduled for release in the coming weeks. Over 2 billion ENA tokens were unlocked in March, and an additional 200 million ENA are set to be unlocked on April 2 and 5. These large releases of new tokens into the market could exacerbate the volatility surrounding ENA, as an increase in token supply typically leads to downward pressure on prices.

Despite these selloff events, ENA has shown some resilience. The token gained 1% intraday, with a price of $0.3989 at the time of writing. However, the overall monthly performance still reflects a decline of 10%, indicating that ENA is struggling to maintain upward momentum. The question now is whether ENA will be able to recover or if further declines are in store.

Mixed Market Sentiment

The market sentiment surrounding ENA is mixed, with analysts offering different perspectives on its future. Crypto analyst ChartCryptic believes that ENA could be on the verge of a breakout, pointing out that the token has recently shown a 7.75% increase in value after testing lower levels. He speculates that if ENA manages to break past the key $1 resistance level, it could rally towards $1.30.

Byzantine General, another analyst, has a more cautious view, suggesting that a cooling funding rate could signal a potential bullish shift. However, other analysts warn that the volatility from selloffs and the large supply of tokens entering the market could continue to cause fluctuations in price, making ENA a high-risk asset in the short term.

Looking Ahead

For now, Ethena remains a token to watch as the market evaluates the effects of WLFI’s selloff, Amber Group’s market movements, and the upcoming token unlocks. Investors will be closely monitoring price levels and key resistance points in the coming weeks, particularly around the $1 mark, to determine if ENA can overcome its current volatility and set the stage for a potential rally.

In conclusion, Ethena (ENA) faces a tumultuous period ahead as a combination of selloffs, token unlocks, and market uncertainty adds pressure on its price. While it has demonstrated some resilience, traders should remain cautious and closely monitor upcoming developments that could shape ENA’s future in the crypto market.