Ethena’s native token, ENA, continues to struggle, with its price plunging to a multi-month low even after a significant allocation to BlackRock’s BUIDL asset. The cryptocurrency dropped to $0.3385 on Thursday, marking its lowest level since November 2023 and extending its losses to over 74% from its peak earlier this year.
ENA Slips Despite BlackRock Investment Boost
Developers at Ethena made headlines this week by allocating $200 million to BlackRock’s BUIDL fund, a tokenized yield-bearing asset. The move propelled BUIDL past the $1 billion milestone, cementing its status as the largest tokenized fund in the industry.
Despite this, ENA’s price failed to respond positively. Investors appeared unconvinced that the move would be enough to drive sustainable growth, with concerns still lingering over Ethena’s long-term stability.
Meanwhile, Ethena’s USDtb stablecoin has expanded rapidly. The token, which is backed by Tether (USDT), USD Coin (USDC), and now BUIDL, has surpassed $540 million in total supply. CoinMarketCap data shows its market cap has grown to over $74 million.
The Terra Shadow Looms Over Ethena’s USDe
Ethena is not just known for ENA—it also operates the USDe stablecoin, which has amassed over 519,000 holders and locked in $6 billion in total value. While impressive, USDe’s growth has raised concerns, with some analysts drawing parallels to the failed Terra ecosystem.
USDe, much like Terra’s infamous UST, operates as an algorithmic stablecoin. Unlike traditional stablecoins backed by cash reserves, algorithmic stablecoins rely on financial engineering and arbitrage mechanisms to maintain their value.
The comparison is enough to make investors uneasy. Terra’s collapse in 2022 wiped out billions in investor funds and triggered a wave of regulatory scrutiny. While Ethena’s model differs in key ways, the mere association has some traders approaching USDe—and by extension, ENA—with caution.
Ethena Ranks Among the Most Profitable Crypto Projects
Despite the price slump, Ethena has emerged as one of the most lucrative projects in the cryptocurrency market. According to TokenTerminal, Ethena has generated $65 million in fees this year, outperforming major blockchain networks like BNB Chain, Morpho, Base, and GMX.
A key reason for its profitability is the success of its USDe stablecoin, which facilitates high-yield strategies through cross-market arbitrage. This mechanism has made it attractive to DeFi users searching for yield. However, skepticism remains about its sustainability, given the inherent risks of algorithmic stablecoins.
ENA Price Analysis: Bears in Control, But For How Long?
The technical outlook for ENA remains bearish. A daily chart analysis reveals that the token formed a double-top pattern at $1.3046, with a neckline at $0.8420. After breaching this key support level, ENA continued its decline, falling below both the 50-day and 100-day Exponential Moving Averages (EMA).
Key indicators suggest that downward pressure remains strong:
- Relative Strength Index (RSI): Continues to decline, signaling weak buying momentum.
- Moving Average Convergence Divergence (MACD): Remains negative, showing no immediate signs of a reversal.
- Average Directional Index (ADX): Trending lower, indicating that the downtrend could be losing momentum.
A descending channel pattern has also formed, raising concerns about further downside. If ENA breaks below the lower boundary of this channel, the next key support level to watch is $0.20—the lowest price in 2024. On the flip side, a recovery above the 50-day EMA could invalidate the bearish outlook and spark a reversal.
