Ethena price risks 37% crash as death cross looms

Ethena price has dropped nearly 40% over the past two weeks and appears headed for further losses as it approaches a bearish “death cross” pattern.

According to data from crypto.news, Ethena (ENA) has dropped 20% over the past 7 days and nearly 100% from its highest point in September. Trading at $0.31 last check Friday afternoon Asian time, the altcoin shed its market cap from $3.7 billion to $2.3 billion when writing.

Ethena price experienced a small rebound on Nov. 6 after the U.S.-based popular trading platform Robinhood announced the listing of the token. However, it quickly returned to its downtrend, as the 171.88 million token unlock, worth about $54.88 million, just a day earlier, continued to pressure prices. Notably, the unlock event came right after another $15.7 million unlock on Nov. 2.

Token unlocks such as these add more tokens into circulation, reduce scarcity, and tend to weigh on prices, especially when overall market activity is muted.

After the latest unlock, there are currently 7.42 billion tokens in circulation, and roughly 70% of this supply is still in the hands of early investors and Ethena team members. As such, investors are likely to remain cautious about potential profit-taking.

At the same time, Nansen data suggests whales have also played a major part in steering Ethena’s downturn. The total balance of tokens held by whale addresses has dropped from 65.24 million on Oct. 31 to 43.06 million at press time. Whale sell-offs often trigger panic among retail traders, who tend to follow suit, amplifying the downward pressure on the related asset.

Ethena price has mostly been in a downtrend since Sep. 9, continuing to trade within what appears to be a descending parallel channel. In technical analysis, a parallel channel is a pattern where the price oscillates between two downward-sloping trendlines, suggesting consistent bearish momentum.

Hence, as long as the price respects this pattern, it is likely to continue sliding further.

The Supertrend indicator has flashed red as it moved above the price line, a telltale sign of growing bearish sentiment.

More importantly, the 50-day SMA looks set to cross below the 200-day SMA, forming a “death cross”, a historically bearish pattern that often signals deeper losses.

However, the RSI, hovering near 32, is close to the oversold threshold. As such, a short-term rebound may be on the table before the ongoing downtrend resumes.

As it stands, Ethena appears to be at risk of further losses down to $0.197, which is 36% below its current price level, a zone last seen in September 2024.

On the contrary, a sustained rebound above the 200-day SMA at $0.47, which also closely aligns with the 38.2% Fibonacci retracement level, would likely indicate a break from the bearish setup and open the door for a more optimistic reversal.