Ethena price has significantly declined this week, marking its longest losing streak on record. The cryptocurrency plummeted to a low of $0.07400, losing over half of its value from its highest level this year. This downward trend in Ethena is reflective of the broader crypto market, with Bitcoin and Ethereum also experiencing significant drops in value.
The decline in Ethena’s price comes amidst a general sense of fear in the crypto industry. The fear and greed index for cryptocurrencies has slipped, indicating a shift towards a more cautious sentiment among investors. This market sentiment has been influenced by the recent drop in the market cap of digital coins, which now stands at $2.4 trillion.
Despite the price drop, the Ethena ecosystem remains robust. The total value locked in the ecosystem has reached a record high of over $3.38 billion, driven by increasing demand for the Ethena USDe stablecoin. USDe has become the fourth-largest stablecoin in the industry, with over 212k holders attracted by its high yield of 27.5%.
However, there are concerns surrounding USDe, including potential regulatory challenges such as a proposed ban on algorithmic stablecoins in the US. There is also a risk of the stablecoin losing its peg in the event of significant volatility in the crypto market. Unlike traditional stablecoins backed by fiat currency, USDe is described by its developers as a “delta-neutral synthetic dollar” backed by assets outside the banking system.
In terms of price forecast, the hourly chart for Ethena shows a strong bearish trend following a peak at $1.0800. The token has slipped below the 50-period moving average, with indicators like the MACD and RSI signaling further downside potential. The next support level to watch is at $0.6550, representing the lowest swing in March.
Overall, the recent decline in Ethena’s price can be attributed to broader market trends and a cautious sentiment among investors. Despite the price drop, the Ethena ecosystem remains strong, with increasing demand for the USDe stablecoin. However, regulatory uncertainties and potential risks associated with USDe raise concerns about its long-term stability. Investors will be closely monitoring market developments and regulatory changes in the coming days.
Discussion about this post