Ethena (ENA), the DeFi token backed by World Liberty Financials (WLF), has gained significant attention following WLF’s recent $500,000 investment. Known for its association with Donald Trump, WLF’s endorsement of ENA is stirring curiosity in the crypto community. After WLF’s investment, ENA saw a 13% price surge, leading many to question whether the token is poised for further growth.

World Liberty Financials’ Strategic Move

World Liberty Financials, a project associated with Donald Trump, recently added Ethena (ENA) to its portfolio. This investment is part of WLF’s broader strategy to acquire top decentralized finance (DeFi) tokens, including well-known names like Ethereum (ETH), Aave (AAVE), and Chainlink (LINK). After WLF’s moves, AAVE and LINK saw price gains of nearly 30%. ENA, too, experienced a notable 13% uptick, raises discussions about its future valuation.

WLF’s backing is seen as a powerful endorsement for ENA, given its involvement in the DeFi space and its history of backing successful projects. As more investors look to capitalize on the influence of such high-profile investors, ENA’s price may continue to benefit from this boost in visibility. But the question remains: is ENA still a good buy, and what are its prospects moving forward?

ENA’s Current Valuation and Potential Risks

Looking at the data, ENA’s price has been performing impressively. As of now, short and mid-term holders of ENA have seen substantial unrealized profits. The 180-day Market Value to Realized Value (MVRV) stands at an impressive 186%, and the 90-day MVRV is 175%. This means that investors who have held ENA for the past three to six months are sitting on significant gains.

Despite this, MVRV suggests that ENA could be slightly overvalued at the moment, particularly for short-term traders looking to capitalize on quick gains. With a value of around $1 per token, just 5% of ENA holders are currently at a loss, which indicates that the market may have priced in much of the token’s short-term potential. For new investors, this could signal that entering now may not offer the best risk-to-reward ratio, as it could be challenging to outperform those who have already seen large returns.

Still, some experts, including well-known crypto investor Byzantine General, argue that ENA still holds considerable upside potential. One of the key reasons for this is the platform’s stablecoin yield feature, USDe, which benefits from positive funding rates and staking. If the market continues to perform well, this could translate into further gains for ENA, making it a strong contender in the long term.

Price Resistance and Future Movements

As for immediate price movements, ENA faces resistance at the $1.22 to $1.25 range. This price range is important because over 850,000 ENA tokens were bought at these levels, creating a strong barrier for price advancement. However, recent price action has shown that ENA is holding strong above the $1.12 level, making it a critical support level to watch.

For traders, the next logical target could be the $1.23 level, offering a potential 15% gain if the token manages to break above resistance. However, a dip below $1.12 could signal a retracement, potentially dragging ENA towards lower levels like the 50-day Exponential Moving Average (EMA) on the 4-hour chart. This would be a signal of a more significant downturn, and traders would need to adjust their positions accordingly.

The Road Ahead for ENA

Ethena’s future largely depends on the broader DeFi market and whether WLF’s backing can continue to drive positive sentiment. While ENA’s valuation is relatively high at the moment, it could still see significant growth, especially with the continued expansion of its stablecoin yield, USDe. If the token can break through key resistance levels and hold above important support zones, ENA may see further price appreciation.

For investors, the decision to enter the market depends on their risk appetite. Short-term traders may find it difficult to enter at the current price, but long-term holders could benefit from ENA’s potential as the DeFi sector continues to grow. As always, investors should carefully consider their positions, keeping an eye on key price levels and market trends.

Conclusion

Ethena (ENA) has garnered significant attention following World Liberty Financials’ $500K investment, with its price showing promising signs of growth. While ENA may be slightly overvalued in the short term, its stablecoin yield and the ongoing backing from WLF could provide strong growth potential in the future. Investors should watch for key price levels, particularly around $1.23, as ENA could experience further bullish momentum if it breaks through resistance. However, caution is advised for those looking to enter the market at current levels, as short-term corrections could occur.