Ethena’s ENA token is feeling the chill, down 3% alongside a crypto market bracing for a bearish winter. The bears are flexing their claws, and ENA isn’t immune.
Having soared just days ago, the token now teeters on a precipice. Traders brace for a potential freefall, a reversal threatening to obliterate its hard-won gains in a swift, merciless correction.
ENA Slumps as Sellers Seize Momentum
The ENA/USD one-day chart screams “bear market.” Forget subtle hints the Balance of Power (BoP) is practically waving a red flag. This isn’t a gentle dip; sellers are dominating, crushing any bullish hopes. The BoP’s current reading of -0.38? Think of it as a gauge of bearish intensity. It’s not just negative; it’s a firm declaration that bears are in control.
ENA BoP. Source: TradingView
Imagine a tug-of-war on Wall Street. That’s the Balance of Power (BoP). It reveals whether the bulls (buyers) or bears (sellers) are winning the price battle. A negative BoP? The bears are roaring, overpowering buyers and dragging prices down, despite their best efforts to climb.
For ENA, this confirms that bears have seized momentum, increasing the likelihood of further downside.
The derivatives market is flashing red for ENA. Funding rates are deep in negative territory currently at -0.0157 signaling a strong bias towards short positions. This overwhelming bearish sentiment reinforces the downward pressure on ENA’s price.
ENA Funding Rate. Source: Coinglass
Imagine a tug-of-war, but instead of a rope, it’s the price of Bitcoin. That’s essentially what the funding rate is in the world of perpetual futures. It’s a periodic payment between traders that acts like a balancing act, keeping the futures price tethered to the actual spot price. Think of it as the market’s way of preventing the future price from drifting too far from reality.
Now, things get interesting when the funding rate dips into the negative. This means short sellers – those betting the price will drop – are actuallypayingthose who are betting it will rise. In essence, it’s a strong signal: the majority of traders are leaning bearish, anticipating a potential price plunge. It’s like the market is whispering, “Heads up, things might get rocky!”
ENA’s negative funding rate paints a bleak picture: bears rule the derivatives roost, fueling predictions of deeper price dives.
$0.41 or $0.64 Could Be Next
ENA is currently hovering around $0.5637, clinging to a fragile lifeline of support at $0.4832. But the air is thin, and if the buying pressure falters, this floor could crumble. Brace yourselves, because a break below could trigger a sharp descent, potentially sending ENA plummeting towards $0.4140.
ENA Price Analysis. Source: TradingView
On the other hand, if buying activity resumes, it could trigger a spike to $0.6451.
Thanks for reading ENA Rally Fades as Negative Funding Rates Point to Further Losses
