After months of slump, Ethena DeFi platform’s ENA on-chain transaction volume is recovering. But does this mean a positive turn for the network, especially its TVL?
ENA began trading in April of this year and was initially characterized by strong daily on-chain transaction volume, surging to over $1 billion on some early days. However, between July and September 2024, transaction volume slowed rapidly, falling below $100 million on most days.
Data shows that ENA’s daily on-chain transaction volume has risen sharply. For perspective, its average transaction volume has exceeded $500 million in the past two days alone. While this may not be as high as in the early days, it seems to confirm that the token may have recorded more transaction volume and demand recently.
The recovery in ENA demand could signal that Ethena could see positive growth after months of decline. In fact, its TVL performance seems to highlight this decline. While the total value locked in the network surged to $3.612 billion in early July, it has since fallen sharply. In fact, Ethena’s TVL fell to $2.43 billion on October 16.
If demand for the token continues long enough, a surge in ENA trading volume could have a positive impact on Ethena’s TVL. This could be the case, especially if the protocol continues to enjoy more utility.
ENA tries to break out of its bottom range
Over the past week or so, ENA has resumed its bullish momentum resulting in a rise in the 50-day EMA, turning the average bullish. Moreover, it seems to have been trying to further break out of the September lows. This is in line with the revival of bullish activity in the entire market.
The cryptocurrency has gained 78% in the past seven days, reaching a high of $0.46. However, ENA’s gains appear to be limited to the ascending resistance line, which it retested during Tuesday’s trading session. It quickly retreated by more than 5%, to a press time price of $0.40.
Although ENA has attempted a nice rebound, it still has a long way to go from its all-time high of $1.52. The real question now is, can the coin sustain the latest rebound and move further up? The bearish divergence suggests that the bulls might face some difficulties in the short term.
ENA’s price action has shown a healthy recovery over the past 2 months, which shows that it remains an attractive token in the market. This could work in its favor in the long run.
Ethena (ENA) Price Analysis
Currently, ENA price is $0.4046, with an intraday correction and a 24-hour decline of 3.68%. In addition, the intraday candle has a correction of 1.93% after encountering a rejection at the 24-hour high of $0.4627.
The daily RSI line is currently struggling to enter the overbought area and is trending down. The momentum indicator shows a slight bearish divergence between the last two peaks, suggesting a possible pullback and retest. Therefore, technical indicators reflect short-term volatility, but there is a possibility of long-term upside.
Currently, with technical indicators maintaining a positive trend and the broader market recovery gaining momentum, Ethena could potentially break through $0.50. In addition, the recent proposal to add SOL as a backing asset for USDe has triggered a buying frenzy.
If the proposal is accepted, ENA price will surge as market sentiment improves and demand increases. According to the Fibonacci levels, a breakout above the 38.20% level at $0.4393 could challenge the 61.80% level at $0.6952.
In simple terms
With ENA showing signs of life on the Ethena network due to a recent surge in traffic, it is worth assessing the potential impact of rising transaction volume on its TVL and ENA’s recovery. ENA’s price action has shown a healthy recovery over the past 2 months, which suggests it remains an attractive token in the market. This could be a boon to it in the long run.
