Ethena (ENA), a rising blockchain protocol, has experienced a wave of price volatility after a large token transfer by a wallet connected to its founding team. The move, involving 17 million ENA tokens worth approximately $5.68 million, has raised eyebrows across the market, especially as it comes just before the token’s much-anticipated listing on Coinbase. While the transfer triggered fears of a potential sell-off, some analysts believe it could signal a turning point for the struggling altcoin.

The situation began when blockchain analytics revealed that a multisignature wallet linked to Ethena Labs transferred 17 million ENA to Flowdesk, a known liquidity provider. Flowdesk then routed these tokens to major centralized exchanges, including Binance, Gate.io, and Bybit. The breakdown of the transfers included over 12 million ENA to Binance and smaller portions to the other platforms. This occurred shortly after the protocol unlocked more than 171 million ENA tokens from a seed sale tranche, representing nearly 3% of its circulating supply.

Large token movements to exchanges are usually interpreted as bearish signals by traders. They often suggest an intention to sell, especially when such transfers follow a token unlock or precede a major market event, such as a listing on a popular trading platform. In this case, the transfer created immediate concerns that the market could face increased selling pressure, as investors feared a dump of tokens might be underway.

The impact on the price of ENA was swift. Within 24 hours of the transfer, the token saw its value fall by nearly 8%, signaling that the market struggled to absorb the fresh supply. The sudden burst of liquidity may have overwhelmed buyer interest in the short term, triggering a short-lived but sharp correction. Despite this, some believe the situation may not be as bearish as it appears.

There is growing speculation that the tokens were not necessarily meant for sale but may have been moved to the exchanges for market-making purposes. This involves providing liquidity on trading platforms to ensure smoother and more efficient trades, a practice that often benefits both price stability and user experience. If that’s the case, the short-term price dip could be followed by a period of more stable trading, or even a recovery.

Supporting this cautious optimism is ENA’s current technical structure. Analysts are pointing to the development of a rounded bottom pattern on ENA’s trading chart—a classic indicator of potential reversal from a prolonged downtrend. This base has been forming over several weeks, suggesting that investors have been gradually accumulating the token even during its price weakness.

If momentum continues to build, ENA could attempt a breakout from its current price range. Traders are watching closely for a move above key resistance levels, which include the $0.79, $0.99, and $1.26 price points. A sustained break above these levels would likely confirm a bullish shift. On the other hand, if ENA falls below its lower support level around $0.30, this would invalidate the positive technical pattern and potentially result in further losses.

Adding another layer of complexity is the upcoming Coinbase listing. Scheduled to begin on June 5, the listing will see Coinbase gradually roll out support for ENA, starting with post-only trading before opening full access. A Coinbase listing is often seen as a bullish driver, particularly because it exposes tokens to a larger, often U.S.-based, investor base. This increased visibility could generate fresh demand for ENA and potentially counteract recent sell pressure.

Meanwhile, Ethena Labs is working on expanding its ecosystem beyond its stablecoin roots. The company recently introduced a collaboration with Securitize to introduce a blockchain network focused on real-world assets, or RWA. This move reflects the growing interest in merging traditional finance with blockchain infrastructure. Ethena’s synthetic dollar, USDe, has already reached near-record circulation levels, showing strong adoption and investor interest in the project’s long-term potential.

Despite current volatility, the bigger picture for Ethena may be more promising than its short-term price action suggests. As institutional interest in blockchain-based RWA solutions continues to rise and ENA gains exposure through Coinbase, the project may be laying the groundwork for a significant recovery. Investors would do well to watch both price levels and future ecosystem developments closely.