Ethena (ENA) triggered a significant event in the crypto market by unlocking 2.07 billion ENA tokens, valued at approximately $740.71 million. This massive increase in circulating supply, accounting for 39.17% of the total supply, raised important questions about market stability, price volatility, and investor sentiment. The unlocking event not only flooded the market with new tokens but also created uncertainty surrounding ENA’s price action moving forward.

Immediate Price Reactions and Market Sentiment

Following the token unlock, ENA initially saw a slight uptick of 1.89%, climbing from $0.4020 to $0.4096. However, the rally was short-lived, and the price quickly retraced to $0.3790, underscoring the pressure from profit-taking and heightened selling activity. This immediate drop reflects how the market reacted to the sudden supply increase. Typically, large unlocks lead to price declines as many holders seek to secure profits, particularly when significant amounts of tokens are introduced into the market.

In parallel with the price movement, large investors moved significant amounts of ENA to major exchanges. A total of 125 million ENA (worth approximately $45 million) was transferred to Binance, Bybit, and FalconX. This large-scale deposit points to the potential for increased selling pressure as these investors may look to capitalize on short-term gains or hedge against a potential downturn in the market.

Supply and Demand Challenges

Historically, token unlocks like this one have a tendency to weigh on prices due to the added supply. In the case of ENA, the sudden introduction of such a large amount of tokens raises concerns about whether demand can keep pace with the increased supply. If market demand fails to absorb the influx of new tokens, it could lead to further downside, with some analysts predicting a potential drop to as low as $0.30. This would represent a significant correction from its current levels.

On the other hand, if buying interest is strong enough, the market could stabilize, and ENA’s price could recover. In this case, a price range near $0.4200 could be a possible target, especially if demand from long-term investors or institutions proves resilient. The ability of the market to absorb the newly unlocked tokens is key to determining whether ENA can regain bullish momentum.

CVD and Volatility Indicators

Further complicating the market outlook for ENA is its current volatility. The Volatility Index stands at 0.3769, indicating moderate market fluctuations. Meanwhile, the Cumulative Volume Delta (CVD) has been trending downwards, signaling that sellers are in control of the market. The CVD has declined from -108.707M to -107.359M and later to -107.07M, suggesting that selling pressure continues to outweigh buying activity.

This bearish CVD trend indicates that traders may be hesitant to enter positions, as the market appears to be dominated by those taking profits or liquidating positions. If this trend continues, ENA could see further downside. However, if the CVD turns positive, it could signal a reversal in market sentiment, and the price could bounce back toward $0.4200.

Futures Market and Open Interest Impact

Another critical factor influencing ENA’s price is its performance in the futures market. The CME Futures Open Interest (OI) for ENA surged to $120,000 on March 6, 2025, coinciding with a rise in Bitcoin’s price to $65,000. Open Interest increased steadily from $20,000 to $100,000 over the preceding weeks, reflecting a growing appetite for leveraged positions. Typically, high open interest can amplify market volatility, as it signifies increased exposure to price swings, with traders betting on future price moves.

If the OI remains elevated, it could fuel a bullish scenario for ENA, potentially pushing its price toward $0.4500. However, if open interest drops below $50,000, it might trigger liquidations and bring ENA’s price down to $0.3800 or lower. The movement of open interest will play a crucial role in determining short-term price action.

Conclusion: Navigating Uncertainty in the Market

The unlock of 2.07 billion ENA tokens has injected considerable supply-side pressure into the market, and investor reactions are already visible in the price movements and trading volumes. While the short-term outlook remains volatile, the longer-term stability of ENA will depend on the market’s ability to absorb this increased supply and whether demand continues to rise. Traders should pay close attention to the CVD, volatility indicators, and open interest in the futures market to gauge the likelihood of a price reversal or continued downward movement.