How Will The Birth Of 53.6 Million ENA Tokens Impact the Market?
Ethena, a synthetic dollar protocol built on the Ethereum chain, will witness the release of 53.6 million ENA tokens in June. Currently trading around $0.8, the introduction of these new tokens may have a significant effect on the market.
Ethena offers a crypto-native solution for money, independent of traditional banking infrastructure. It provides globally accessible dollar-denominated saving instruments called “The internet Bond.” The platform achieves scalability by delta hedging the Ethereum and Bitcoin collateral.
ENA, the platform’s synthetic dollar, is fully backed by delta hedging derivatives positions against protocol-held collateral. It does not employ excessive leverage beyond its natural state to margin the derivatives position. Examining the blockchain and price action activity of the protocol can provide insight into its performance.
Ethena has gained substantial popularity since its launch, with 38,499 holders according to Etherscan data. There have been 320,438 transfers executed since its inception. A majority of addresses (76.6%) hold between $0 and $1,000 worth of ENA, while only 0.54% of addresses hold $100,000 or more.
The platform’s total value locked (TVL) stands at $2.3 billion but has experienced stagnation in recent months. The annualized fees reached a peak of $206 million but have been declining steadily. Currently, the platform’s daily revenue is $3,000.
Ethena’s median APY is 12.2%, but it faces negative USD inflows. Furthermore, the platform has a low number of developers and commits. The portion of ENA staked has declined to 13%, as reported by Dune Analytics.
ENA has a market cap of $1.1 billion, with only 9.5% of the circulating supply available. The digital asset’s price has seen a 25% decline in volume. ENA is currently ranked 69th based on market cap and is trading at around $0.78, experiencing an 8% drop in the intraday session.
The price of ENA is currently below the 50 and 100 EMAs, acting as resistance levels. Its upward trend may face obstacles around the $1 mark, while support can be found near $0.6. The RSI indicator suggests neutral sentiment at around 45, while the MACD indicates consolidation.
In conclusion, the upcoming token unlock of 53 million ENA tokens in June may increase selling pressure in the market. Ethena’s TVL and active address count are experiencing stagnation, but there is potential for the ENA token price to reach new highs in the future.
Disclaimer: The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or any other form of advice.