Token Unlocks and Whale Selling Fuel Ethena's 80% Price Drop

Ethena's governance token (ENA) made a significant move into mainstream finance this week after officially listing on Robinhood (HOOD), a development that coincides with renewed pressure on the token's price amid a large-scale token unlock, according to a Stocktwits report. The ENA token, which had surged to over $1 in September, has since fallen roughly 80%, trading around $0.31 as of Thursday, the report noted. The price decline has been exacerbated by the release of over 200 million ENA tokens into circulation in early November, representing 45.4% of the total 15 billion token supply, the article added.

With a full unlock expected by April 2027, analysts warn that continued token inflows could further suppress ENA's value.

The unlock events, which have already distributed $60 million to core developers and early investors, have intensified retail and institutional caution, the Stocktwits piece reported. On Stocktwits, retail sentiment for ENA remains bearish, with traders expressing concerns about the token's ability to recover. Meanwhile, whale activity has also contributed to downward pressure. Nansen data reveals that whale-held ENA balances dropped from 65.24 million to 43.06 million between October 31 and November 6, triggering panic-driven sell-offs, according to a Crypto.news analysis.

Despite the price slump, Ethena's broader ecosystem—particularly its USDe stablecoin—has drawn attention as a potential catalyst for long-term value. USDe, which combines Ethereum liquid staking derivatives with short perpetual contracts, holds $8.9 billion in total value and ranks as the third-largest stablecoin after Tether (USDT) and USD Coin (USDC), the Stocktwits article noted. Binance's recent listing of USDe and activation of its "fee switch" mechanism—a $500 million buyback program—has been cited as a bullish development for ENA. BitMEX co-founder Arthur Hayes, who holds over five million ENA tokens, has labeled the move "potentially transformative," according to the same coverage.

Technical indicators, however, paint a grim picture. Ethena's price is approaching a "death cross" pattern on daily charts, a bearish signal indicating a potential 37% price drop, the Crypto.news analysis observed. The token has also lost 20% of its value over the past week, with its market cap shrinking from $3.7 billion to $2.3 billion, the report added. Market analysts attribute the weakness to a combination of token unlocks, whale selling, and broader crypto market volatility. If Bitcoin dips below $100,000—a key support level—the broader crypto market could see further declines, dragging ENA down with it, the Stocktwits coverage warned.

Ethena's tokenomics remain a double-edged sword. While the Robinhood listing signals growing institutional legitimacy, the protocol's reliance on token unlocks to fund development and reward early investors has created persistent supply-side challenges, the Stocktwits article pointed out. Over 6.8 billion ENA tokens are now in circulation, with another 5.99 billion locked and set to enter the market through 2026. This gradual release model, while designed to prevent shock to the market, has kept speculative interest in check.

Looking ahead, Ethena's fortunes may hinge on the success of USDe and the effectiveness of its buyback mechanisms. The stablecoin's multi-chain deployment across 24 blockchains and its integration with major DeFi platforms suggest strong adoption potential, according to a MEXC guide. However, without a sustained increase in demand for ENA, the token could remain under pressure as supply continues to expand.