Étienne Girard
Ethena (ENA), one of July’s top-performing crypto assets, is now at a pivotal turning point. After skyrocketing over 140% in a single month, the token faces growing downside risks as whale investors exit and a massive 171 million token unlock looms on August 5.
At the time of writing, ENA is trading near $0.61, reflecting an 11% daily gain and extending its 30-day surge to over 140%. Trading volume has also spiked 33%, placing ENA in the spotlight across crypto markets. However, dark clouds may be forming on the horizon.
What Fueled Ethena’s Explosive July Rally?
Ethena’s meteoric rise in July wasn’t driven by a single event. Instead, it was the culmination of multiple bullish catalysts, including protocol expansion, stablecoin growth, whale accumulation, and key exchange listings.
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TVL Growth: According to DeFiLlama, Ethena’s total value locked (TVL) increased 73% in 30 days, positioning it as the 6th largest DeFi protocol globally.
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Stablecoin Milestone: USDe, Ethena’s synthetic stablecoin, grew 75% month-over-month, surpassing $9.3 billion in circulation—becoming the third-largest stablecoin behind only USDT and USDC.
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Exchange Listings: ENA’s July 11 listing on Upbit, South Korea’s largest crypto exchange, brought in new liquidity and investor interest from Asia.
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$260M Buyback Plan: A separate $360M fundraising round from StablecoinX, with $260 million allocated to buying back ENA, added short-term demand pressure and accelerated the rally.
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Regulatory Breakthrough: Ethena’s USDtb stablecoin became one of the first to meet standards under the U.S. GENIUS Act, following collaboration with Anchorage Digital.
$104M Token Unlock Could Trigger Sell-Off
Despite the strong fundamentals, Ethena may now face downward pressure due to an upcoming token unlock worth $104.56 million. On August 5, 171.88 million ENA tokens—equal to 2.7% of the total circulating supply—will be released into the market.
To date, only 42.3% of the 15 billion total ENA supply has been unlocked. Historically, such unlocks can lead to increased selling pressure, especially when market sentiment has recently been bullish. Even if not all tokens are sold, the mere increase in circulating supply may dampen price momentum.
Whales Are Cashing Out
Recent on-chain data paints a bearish picture. According to Nansen, whale wallets have reduced ENA holdings by 30% over the past week, now holding just 37.93 million tokens.
In parallel, public figure wallets—used to track crypto influencers—have seen their ENA balances plunge 75%, now holding only 2.54 million tokens.
Notably, Arthur Hayes, a high-profile trader who accumulated ENA in July, sold $4.62 million worth of the token recently. He cited growing macroeconomic uncertainty—including weak U.S. labor data and slowing global credit—as the reason for retreating from volatile assets.
ENA Price Analysis: Bearish Pattern Taking Shape
Technically, ENA has formed an ascending broadening wedge—a chart pattern often associated with increased volatility and potential reversal.
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Support Level: ENA is currently hovering near $0.52, the wedge’s lower trendline. A confirmed breakdown could open the door to a broader market correction.
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MACD Crossover: The MACD indicator has already produced a bearish signal, suggesting declining bullish momentum.
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RSI Trend: The Relative Strength Index (RSI) has dropped to 62, still near overbought territory but now trending downward, confirming weaker buying pressure.
If ENA fails to hold the $0.47 psychological support, the price may retreat to July lows near $0.24. A further breakdown could target $0.07, matching the wedge’s projected downside.
Conclusion: Ethena’s Future Hinges on Unlock Impact and Whale Behavior
After an impressive rally driven by strong fundamentals and strategic developments, Ethena now faces its first major stress test. The combination of a looming $100M token unlock, whale sell-offs, and a bearish technical setup could disrupt recent gains.
If the protocol can maintain investor confidence and absorb the new supply without significant price damage, it could resume its uptrend. Otherwise, a deeper correction might be on the way.
