ENA Plummets 19% Amid Bearish Derivatives Activity

In the past 24 hours, Ethena [ENA] experienced a significant decline, falling by 19%. This drop erased recent gains and pushed the token to a key support level near $0.30. The decline in ENA's price has been largely attributed to activity in the derivatives market. According to CoinGlass, ENA’s Open Interest Weighted Funding Rate turned negative for the first time in 10 days, indicating a bearish sentiment shift. Additionally, the Long-to-Short Ratio slipped to 0.8619, suggesting that sell orders have outpaced buy contracts, a situation that often precedes further downside unless quickly corrected.

Despite the recent decline, there are signs that the drop may be nearing its end. ENA has consistently recorded liquidity inflows, as indicated by the total value locked (TVL). At press time, TVL was $5.426 billion, with $722 million staked or purchased in May alone. This sustained liquidity inflow is a positive indicator for ENA's potential rebound. Furthermore, ENA recently traded into a key Fair Value Gap (FVG) demand zone, reaching the midpoint of this zone at $0.3044. Historically, this level has triggered the start of a rally, and if momentum builds from this point, ENA could gain 34%, potentially reclaiming the $0.4080 mark.

However, the path to a rally will not be smooth. The In/Out of the Money Around Price (IOMAP) metric indicates that ENA will face resistance between $0.313 and $0.327, with heavy selling pressure totaling 253 million ENA in this range. Additionally, the Liquidation Heatmap reveals a dense band of unfilled contracts around $0.32, setting up a potential rejection if buyers stall. These factors suggest that while there is potential for a rebound, ENA will need to overcome significant resistance to achieve a sustained rally.