Mellow Finance Invests $4.48 Million in Ethena Amid Market Correction

Mellow Finance, a prominent player in the cryptocurrency market, recently made a significant move by withdrawing 15.147 million ENA, valued at approximately $4.48 million, from Bybit. This transaction was transferred to a personal wallet, marking the first time Mellow Finance has invested in an altcoin during a market correction phase. The decision to invest in Ethena [ENA] at this juncture suggests a strong belief in the future potential of Ethena Labs, despite the broader market downturn affecting altcoins.

This strategic move by Mellow Finance indicates a high level of confidence in Ethena's fundamentals, which the fund perceives as undervalued. The timing of this investment, during a market correction, implies that Mellow Finance sees significant value in ENA that is not yet reflected in its current market price. This could be a sign of institutional backing for Ethena within the broader crypto infrastructure, potentially boosting market sentiment amidst the challenging performance of altcoins.

Derivative markets for ENA have shown positive signs, with Funding Rates turning positive on major exchanges such as Bitmex, Hyperliquid, and Bybit. This shift signals that traders are once again willing to pay to hold long positions, marking a key change from the prolonged negative Funding Rates observed in April. Additionally, the Aggregated Orderbook Liquidity Delta has returned to positive figures, indicating renewed buy interest, albeit cautiously. This inflow suggests a potential short-term base for ENA around the $0.30 mark, with green delta bars on the order book indicating a revival of interest in buying.

The Binance ENA/USDT Liquidation Heatmap reveals critical risk zones that could influence ENA's price movement. There is $262K in liquidation leverage below $0.28, which could act as short-term support if bulls defend this level. Conversely, stacked short liquidations above $0.30 present an opportunity for a squeeze if the price breaks through this resistance. The proximity of ENA's trading price to these levels could result in a significant move, whether it be a breakout or a trap, depending on the conviction of traders.