Ethena (ENA) is catching the attention of investors and analysts alike. Over the past 24 hours, Ethena has surged by 12.61%, extending its 7-day rally to 34.22%. This upward momentum is pushing the altcoin closer to the crucial $1 mark, raising excitement about the potential for a major breakout.

Ethena Price Action: A Rounding Bottom Pattern

The technical outlook for Ethena is currently shaping up positively, with the price action forming a rounding bottom reversal pattern on the daily chart. This chart pattern typically signals a shift from a downtrend to an uptrend, making it a key indicator for bullish traders. As the price approaches the neckline of the rounding bottom, which coincides with the 78.60% Fibonacci retracement level at $0.9595, Ethena is set for a potential breakout.

Currently trading at $0.9631, Ethena has posted an intraday gain of 5.71%, marking two consecutive bullish candles. The price is now testing the overhead supply zone, ranging from $0.96 to $1.03, which is a critical zone for the asset’s next move. If Ethena breaks through this resistance zone, the next major target could be the 100% Fibonacci level at $1.46.

Moving Averages Signal a Bullish Crossover

Another key indicator pointing to a positive outlook for Ethena is the recent crossover of the 50-day and 200-day Simple Moving Averages (SMA). The rising 100-day SMA is also closing in on the 200-day SMA, which suggests that a new bullish crossover may occur soon. This positive alignment of moving averages supports the idea that the market sentiment is becoming increasingly favorable for Ethena, raising the likelihood of an extended rally.

While the Relative Strength Index (RSI) has entered the overbought territory at 76.18%, signaling a potential pullback or consolidation, the overall trend remains strong. A pullback could be expected after a breakout, but if the price sustains above the neckline and key Fibonacci levels, the upward momentum could continue.

Price Targets for Ethena

Using the rounding bottom pattern, traders can calculate price targets by measuring the distance between the bottom and the neckline. The price target is then projected to the 1.618 Fibonacci extension level, which places the potential peak at $4.91. This implies that Ethena could see a massive 400% price increase if the breakout rally continues to unfold as expected.

However, if the price fails to maintain momentum above the 78.60% Fibonacci level and encounters resistance, a bearish reversal could lead to a test of the support level near $0.69. Despite this, the overall bullish setup indicates that the potential for significant upside remains intact.

Factors Driving Ethena’s Rally

Several factors are contributing to the ongoing rally in Ethena. One of the primary catalysts is the growth of the USDe stablecoin, which has seen its total value locked (TVL) approach $5 billion. This provides strong backing for the Ethena ecosystem, adding credibility and stability to the token.

Additionally, the offering of nearly 30% annual percentage yield (APY) for USDe deposits has further fueled investor interest. Traditional financial players such as Franklin Templeton and Fidelity are also showing support for Ethena, which could bring more institutional capital into the market, helping to drive up the token’s price.

The massive market caps of stablecoins like Tether (USDT) and USDC, valued at $135 billion and $40 billion, respectively, have provided a strong foundation for USDe to potentially reach similar levels. As the demand for stablecoins grows, the value of Ethena may continue to rise along with it.

Conclusion

Ethena (ENA) is showing strong bullish signals, with a rounding bottom pattern setting the stage for a breakout. With the support of key technical indicators and growing adoption of USDe, Ethena could be poised for a significant price surge. While a 400% rally to $4.91 is not guaranteed, the prospects for continued growth look promising, especially as the broader crypto market remains bullish. Investors should keep an eye on key levels of resistance and support, as the unfolding price action could offer substantial gains for those who act at the right time.