The price of Ethena remained under pressure on Saturday as traders awaited the next monthly token unlock. The ENA token has decreased for three consecutive days, reaching its lowest swing since April 2022. It has fallen by almost 80% from its highest swing in November last year.
ENA Token Unlock
Ethena is one of the biggest players in the crypto industry with over $1.6 billion in market cap. It runs two of the largest stablecoins in the industry. The flagship Ethena USDe stablecoin has over $4.68 billion in assets, while the recently launched Ethena USDtb has accumulated over $1.43 billion.
The price of Ethena will be in the spotlight this week as the dilution gains steam. According to DeFi Llama, the token has a total supply of 15 billion and a circulating supply of 5.5 billion.
Ethena releases new tokens on the fifth of every month. In this case, the network will unlock 171.88 million tokens worth $50 million on Monday. Most of these token unlocks will be allocated to insiders, including the team, advisors, and contractors. 78.16 million ENA tokens will be allocated to a private sector investor.
The last Ethena token unlock will happen in April 2028, meaning that the holders will continue to be diluted. This dilution is a major risk to the price of Ethena.
The other risk is that Ethena has a large concentration of insiders. Whales hold 81.24% of the tokens, which is a risk if they decide to liquidate. Last month, Mantra price crashed in what some analysts attributed to a dump by insiders. Furthermore, there is a risk associated with USDe, as it is a stablecoin that is not backed by any hard assets.
Ethena Price Analysis
The daily chart shows that the Ethena token peaked at $1.3283 in December and has now dropped to the current $0.2900, its lowest level since April 2022. It has remained below the 50-day moving average.
Ethena has formed a falling channel and is now below the upper side of the descending channel. The Relative Strength Index (RSI) and the MACD indicators are trending downwards.
Therefore, the ENA price is likely to continue to fall as sellers target the psychological point at $0.20. A move above the upper side of the channel at $0.3775 will invalidate the bearish outlook and point to more gains.
