Ethena (ENA), the governance token of Ethena Labs, has surged by an impressive 11% within 24 hours, climbing to $0.3791 amid a broader cryptocurrency market recovery.
This rebound follows a brutal 69% correction over the past 60 days, offering a glimmer of hope to investors.
However, the optimism is tempered by a monumental token unlock event today, releasing 2.07 billion ENA tokens worth over $764 million—39% of its circulating supply—casting a shadow of uncertainty over its near-term stability.
A double-digit rally amid market recovery
The cryptocurrency market awoke to a wave of positivity on March 5, spurred by hints from the US Secretary of Commerce that President Donald Trump might roll back tariffs on Canada and Mexico.
This news lifted sentiment across the board, and Ethena’s $ENA token rode the tide, climbing from a 24-hour low of $0.337 to a high of $0.3912.
However, despite this short-term boost, the token remains far below its December 2024 peak of $1.31, reflecting the lingering effects of a prolonged downtrend that has tested investors’ resolve.
Also, today’s rally, while encouraging, arrives at a pivotal moment. Technical analysts note that ENA is currently testing a crucial support zone between $0.31 and $0.40, a range that could determine its next move.
A successful hold here might propel the token toward $0.80, especially if it breaks above its 25 simple moving average, signaling a potential trend reversal.
The market’s broader recovery provides a tailwind, but the looming unlock event complicates the outlook, leaving traders on edge.
The Ethena token unlock: a $764 million wildcard
Today’s unlock of around 2.07 billion $ENA tokens represents a defining test for Ethena Labs and its community.
Valued at over $771 million, this influx includes 1.13 billion tokens for core contributors, 937.5 million for investors, and 7.93 million for ecosystem development.
Ethena token unlock events by cryptorank
With 38.8% of the circulating supply hitting the market, the potential for sell pressure is significant.
Going by historical behaviors of investors during such token unlocks, early investors and insiders, who have held their tokens for nearly a year, might seize this opportunity to exit, especially given $ENA’s 74.9% drop from its all-time high of $1.52 last April.
Yet, the impact isn’t guaranteed to be negative. Ethena’s circulating supply will rise from 5.29 billion to over 7.36 billion, potentially diluting value if demand falters.
However, if market confidence holds—buoyed by the rally and Ethena Labs’ stablecoin momentum—the unlock could become a non-event or even a catalyst for growth.
Historical unlock events have shown mixed outcomes, with some projects weathering volatility to emerge stronger, while others succumbed to downward pressure.
For $ENA, the stakes are high as it balances this supply shock with its technical support test.
Stablecoin strength bolsters Ethena’s ecosystem
Beyond the ENA token, Ethena Labs is fortifying its position in the stablecoin arena, which could indirectly support its governance token’s resilience.
USDe, its synthetic stablecoin with a $5.4 billion supply, has gained traction as a yield-bearing alternative to Tether’s USDT and Circle’s USDC, offering a 9% yield through a delta-neutral hedging strategy.
Partnerships with exchanges like Bybit, where users can mint and redeem USDe, and MEXC, which invested $20 million in USDe last month, underscore its growing adoption.
Adding to this momentum, Ethena introduced USDtb, a stablecoin backed by BlackRock’s $500 million BUIDL fund, with Bybit offering a 5% APR for holders starting today.
This move, alongside a $100 million funding round to develop iUSDe for traditional finance, highlights Ethena’s ambition to bridge crypto and regulated markets.
While these developments don’t directly dictate $ENA’s price, they enhance the ecosystem’s credibility, potentially attracting demand that could offset unlock-related selling pressure.
Nevertheless, the immediate focus remains on how the market digests today’s token release.
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