Ethena's ENA Token Surges 110% in Six Days Driven by Whale Accumulation

Ethena (ENA) has seen a remarkable surge in value, with its price increasing for six consecutive days to reach its highest level since March. This upward momentum is fueled by significant inflows into the Ethena ecosystem and substantial accumulation by large investors, or whales. The ENA token reached a high of $0.4617, representing an 110% increase from its lowest point this year. This surge has propelled Ethena's market capitalization to nearly $3 billion, indicating a high-volume trading environment.

The growth of Ethena is intricately linked to the increasing investment in its algorithmic stablecoins. Data reveals that the total value locked in its platform has surged to over $6.17 billion, surpassing the previous all-time high of $6.1 billion. The majority of these assets are in USDe, Ethena's algorithmic stablecoin, which holds over $6 billion. The remaining funds are in Ethena Labs USDtb, which has over $159 million in assets.

The USDe assets have experienced a notable increase as the annual percentage yield crossed the 10% milestone for the first time this year. This makes USDe a more attractive yield-generating asset compared to other cryptocurrencies. However, the future availability of USDe in the U.S. remains uncertain following the signing of the GENIUS Act into law. This legislation mandates that all stablecoins offered in the U.S. must be backed 1:1 with US dollars and other liquid assets like government bonds. Ethena’s USDe stablecoin, however, does not adhere to this requirement. Instead, it employs a delta-neutral algorithmic strategy to maintain its price at $1, similar to the collapsed Terra USD. This strategy involves pairing collateral with an equivalent short position of a perpetual contract, allowing arbitrageurs to profit by minting or redeeming USDe if its price falls below $1. The sUSDe then generates yield through a combination of staking rewards and funding rates from the delta-neutral strategy.

The rising price of ENA is also attributed to the continued buying by whales. Data indicates that whales hold 43.6 million ENA tokens, representing a 14.6% increase over the last 30 days, while exchange balances have fallen to 7.27 billion. This accumulation by large investors suggests a strong bullish sentiment towards Ethena.

The daily price chart of ENA shows a strong recovery over the past few days, crossing the important resistance level at $0.4615, which was the highest swing on May 14. This movement confirms that bulls are in control of the market. Ethena’s price is now targeting a move above the 23.6% retracement level at $0.4841. Its 50-day and 100-day Exponential Moving Averages are also nearing their crossover, indicating a potential continuation of the upward trend. Analysts predict that the token is likely to rise further as bulls target the 50% retracement level at $0.7758, which is approximately 70% above the current level.