Ethena [ENA], a cryptocurrency that has gained attention in the market, is facing significant challenges as it enters 2025. With its price steadily declining over the past week, losing 11.89% of its value, and another 2.01% in the last 24 hours, traders and investors are bracing for what could be a dramatic downturn. Market indicators suggest that ENA could see a 50% price drop, potentially hitting $4.5 in the coming weeks.

A Bearish Pattern Takes Shape

One of the most alarming signs for Ethena is the emergence of a head-and-shoulders pattern on its 4-hour price chart. This classic technical indicator is often associated with a shift from bullish to bearish trends. The pattern, which appears to be nearing completion, could trigger a steep decline if ENA breaks below its support level, commonly referred to as the neckline.

Should this bearish signal play out, analysts warn that ENA might plummet to $4.5 or even lower. With limited support levels to halt such a decline, the token’s price could spiral further unless there’s a significant influx of buying interest.

Mounting Selling Pressure in the Market

Adding to the bearish sentiment is the growing selling pressure observed in the derivatives market. The Funding Rate, which reflects the cost of holding long or short positions, is currently in negative territory at -0.0019%. This indicates that traders betting on ENA’s price falling are paying premiums to maintain their positions.

Meanwhile, Open Interest, a measure of active trading positions, has dropped by 2.43% over the past 24 hours to $558.53 million. A reduction in Open Interest often signals that traders are closing their positions to avoid further losses, a sign of diminishing confidence in the token’s future.

Exchange Data Signals Trouble

Exchange activity also paints a grim picture. Over the past four days, fewer ENA tokens have been withdrawn from exchanges. This trend has resulted in an increased supply of tokens available for trading, which could amplify selling pressure and drive prices down further.

Upcoming Token Unlock Could Shake the Market

A major event looming over ENA’s price is the scheduled unlock of 12 million tokens on January 1. This unlock will significantly increase the circulating supply of ENA in the market. Unless there is sufficient demand to absorb this influx, the added supply could accelerate the token’s downward trajectory.

Historically, token unlock events often lead to short-term price drops as the market struggles to accommodate the increased supply. For Ethena, this event could prove to be a tipping point, further fueling the bearish momentum.

What Lies Ahead for ENA?

Ethena’s current situation presents a challenging outlook. If the head-and-shoulders pattern is confirmed and the token unlock exacerbates selling pressure, a steep drop to $4.5 or even lower seems likely.

However, not all hope is lost. A sudden surge in buying activity or positive market sentiment could stabilize ENA’s price and help it recover from its current slump. Investors will need to closely monitor market trends and technical indicators to gauge the token’s next moves.

Conclusion

As Ethena [ENA] navigates a challenging start to the year, the cryptocurrency’s fate hangs in the balance. With bearish signals dominating the charts and a significant token unlock on the horizon, the coming weeks will be crucial in determining whether ENA can weather the storm or succumb to further declines.

For now, traders and investors should approach with caution, keeping a close eye on market dynamics and preparing for potential volatility.