Ethena (ENA) has been struggling recently, with bearish trends tightening their grip on the asset. Over the past 24 hours, ENA dropped by 6.5%, further deepening concerns about its future performance. The cryptocurrency’s trading volume has also been slashed nearly in half, indicating a lack of conviction in the market. Despite some minor recoveries, the absence of sustained buying activity is a worrying sign for investors.

The pressure is only expected to increase with upcoming token unlocks, which could add additional selling pressure to an already weakened market. Around 8% of the total ENA supply is still locked, and as these tokens enter circulation, they could exacerbate the downward trend unless there’s a significant shift in market sentiment.

However, there are still some glimmers of hope for Ethena, especially when looking at its synthetic stablecoin, USDe, which has been performing relatively well amid recent volatility. The USDe has maintained its peg and even saw its market capitalization exceed $6 billion, which bodes well for the Ethena protocol as a whole.

The Technical Outlook: Bears In Control, but Bulls Have a Chance

Looking at the technical picture, the overall market structure of Ethena is firmly bearish. The price action has been characterized by a series of lower highs and lower lows over the past three weeks, signaling persistent downward pressure. Additionally, the Accumulation/Distribution (A/D) indicator has been steadily falling since December, reflecting the absence of strong buying interest and adding to the bearish outlook.

However, there are key support levels that could offer a lifeline to the bulls. The 61.8% and 78.6% Fibonacci retracement levels have been highlighted as critical zones where the price could find some stability. These levels are crucial for any potential recovery, but for now, the market remains vulnerable to further declines.

The recent drop in price has left many traders feeling uncertain, and the A/D indicator’s continued descent further supports the bearish sentiment. This lack of bullish conviction was evident during the recent liquidation event, where Ethena struggled to hold up.

Token Unlocks Pose Further Risks

A major concern for ENA holders is the upcoming token unlocks. As mentioned earlier, nearly 8% of the total ENA supply remains locked, and when these tokens are unlocked, they could flood the market and add to the selling pressure. While the synthetic stablecoin USDe remains strong, the release of locked tokens could weigh heavily on ENA’s price action.

This factor makes it particularly important for investors to be cautious and prepared for potential volatility in the coming months. With no clear signs of a rebound, the selling pressure from token unlocks could hinder any significant recovery for Ethena.

Key Levels to Watch

Despite the current bearish outlook, traders can still find some hope in certain key support levels. The $0.5 price level is an important level to watch, as it represents a significant bullish order block from November that triggered a rally. If Ethena can hold this support, there’s potential for a recovery, although it will depend on the broader market sentiment and trading activity.

Further support can be found at $0.437, which is the next level to monitor should the price fall further. If ENA drops below $0.5, it could open up opportunities for short-selling, as the price may test the $0.437 region. However, if the price manages to hold above $0.5, there could still be a chance for a bounce and a potential move higher.

On the upside, the $0.68 region is a critical resistance level, especially on the 4-hour chart. A break above this level could signal a shift in market structure, potentially turning the bearish trend into a bullish one. A move beyond the recent lower high at $0.678 would be an essential step for the bulls to reclaim control.

Outlook: Can ENA Recover?

While the market is currently in a bearish phase, it’s not all doom and gloom for Ethena. If the price can hold the critical support levels and avoid further selling pressure from token unlocks, there is a possibility for a recovery. However, the lack of consistent buying volume and the bearish market structure present significant challenges for any upward momentum.

For now, investors should be cautious and monitor key price levels closely. The next few weeks will be crucial in determining whether Ethena can find support or continue its downward trajectory. Should the bears maintain control and the price drop below $0.5, a deeper decline could be in the cards, potentially testing the $0.437 region.

On the other hand, if the bulls manage to flip the market structure and push above the $0.68 resistance, there could be room for a potential recovery. However, for now, the market remains uncertain, and investors must be prepared for both potential upsides and further losses.

Conclusion: Key Levels and Market Sentiment Will Shape ENA’s Future

Ethena (ENA) is currently under significant bearish pressure, with key technical indicators pointing to a lack of market conviction. The upcoming token unlocks pose an additional risk, and traders must be cautious in the face of ongoing volatility. However, the presence of critical support levels and the performance of the USDe stablecoin offer some hope for recovery, provided ENA can avoid further selling pressure and regain bullish momentum.

As always, investors should stay alert to key price levels and the broader market sentiment to navigate the challenges ahead. The coming weeks will be pivotal for Ethena as it works to regain its footing and determine its future direction.