Digital tokens suffered sudden dips as Bitcoin plunged beneath $95K after the US CPI data.
While top altcoins XRP (-3.05%), Solana (-3.30%), and AVAX (-5%) reflected the dwindled sentiments, Ethena led the downside with an over 12% dip.
Besides the worrying inflation figures, today’s Ethena unlock intensified ENA’s price plunge on the daily chart.
Ethena unlocks nearly 8M coins
The crypto project unlocked 7.93 million ENA tokens, worth approximately $3.33 million, on February 12.
Source – Tokenomist
That represented 0.25% of Ethena’s total supply.
Token unlocks influence supply and demand dynamics as they increase assets in the market.
The events often trigger selling momentum, catalyzing price dips.
Nevertheless, token releases have long-term benefits.
Despite the initial price plunges, these unlocks can enrich liquidity, allowing individuals to purchase or sell assets without much impact on price actions.
Ethena planned gradual token unlocks to bolster ENA’s stability.
US CPI weakens crypto market
The latest economic report shows the United States inflation soared to 3%, exceeding the prior month’s 2.9% and experts’ 2.8% forecast.
The Fed’s worst nightmare just got worse:
CPI inflation just officially JUMPED +0.5% in one month, the largest increase since August 2023.
Core CPI inflation was expected to fall to 3.1%, but instead ROSE to 3.3%.
What’s does this mean? Let us explain.
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Also, inflation surprised markets monthly, with January’s 0.5% reflecting a 0.4% increase from the previous month.
Also, the core CPI (excluding energy and food prices) increased from December’s 0.2% to 0.4% in January.
The core CPI jumped from 3.2% to 3.3% year-on-year, beating Wall Street’s expectations of 0.3% monthly and 3.1% YoY.
The hotter-than-predicted inflation numbers further diminished trader optimism.
Crypto enthusiasts have been cautious over the past few sessions amid macroeconomic uncertainties.
Furthermore, Federal Chair Jerome Powell revealed that the bank will adopt a cautious rate policy plan, further dampening market sentiments.
Cryptocurrencies were quick to react to the CPI with bearish actions.
The crypto market capitalization declined by 2% to $3.13 trillion as most tokens saw substantial retracements.
ENA drops 12%
The substantial token unlock and dampened broad market sentiments saw Ethena bears thriving.
While the alt demonstrated resilience following the 7.93 million asset release, the CPI triggered sharp dips.
Ethena’s price plunged from its daily peak of $0.4652 to $0.4089 – a 12.1% slide.
ENA changes hands at $0.4127, with visible bearishness signaling further declines.
Chart by Coinmarketcap
Technical indicators confirm the downbeat mood.
The Moving Average Convergence Divergence’s bearish crossover with the signal line highlights trend shifts to the downside.
Also, the Chaikin Money Flow indicator remained negative (at -0.21 during this publication.)
That indicates more cash leaving the ENA ecosystem.
Such trends might extend the altcoin’s near-term struggles.
However, broad market developments remain vital for Ethena’s performance.
Enthusiasts will likely watch tomorrow’s United States PPI inflation report.
Cryptocurrencies will likely dip further if the PPI matches the CPI stats.
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