Why Ethena’s Price Rally Might Just Be a Mirage in the Crypto Desert

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  • Ethena has decided to break free from its descending channel, like a teenager escaping a family reunion.
  • But hold your horses! Long-term holders are still nursing losses, suggesting ENA might need a little more time in the oven.

So, Ethena [ENA] made a bold move on May 10, breaking through a previous lower high of $0.35. It’s like that moment when you finally manage to open a jar of pickles after wrestling with it for an hour.

And wouldn’t you know it? This breakout coincided with a dramatic escape from the descending channel (the white one, not the one on your TV). Over the past week, ENA has been retesting those channel highs like a cat returning to a sunny spot on the floor.

With Bitcoin [BTC] flirting with new all-time highs, the crypto market is practically buzzing with excitement. It’s like a room full of people who just discovered a new coffee shop—everyone’s giddy and ready to spend.

Technical analysis shows that ENA has seen a spike in trading volume over the last ten days. The OBV has also broken above the highs from March and April. Meanwhile, the RSI is behaving itself, not forming any bearish divergence. It’s like the indicator is saying, “I’m feeling good, let’s keep this party going!”

On-chain metrics warn of an overvalued ENA

Daily active addresses for Ethena have been commendable lately, peaking on May 9 with the largest single-day count since February 6. It’s like a popular restaurant that suddenly has a two-hour wait—everyone wants a piece of the action!

But here’s the kicker: the demand for Ethena isn’t exactly sweeping the nation. The mean coin age has been on a steady decline since mid-February, with only a few brief moments of excitement. It’s like watching a soap opera where the plot just keeps dragging on.

A rising mean coin age usually means people are hoarding their coins, but the current low values compared to December and January suggest Ethena might be nearing the end of its distribution phase. Despite the breakout, ENA doesn’t seem to have a strong bullish outlook on the higher timeframes. It’s like a balloon that’s lost its air—still floating, but not for long.

Finally, the MVRV ratio is in agreement, showing that 180-day holders are sitting on a mild loss of 14.5%. Combine that with the slumped mean coin age, and ENA doesn’t look like a long-term investment opportunity. It’s more like a fleeting crush—exciting at first, but ultimately disappointing.

Moreover, the elevated NVT values over the past few months indicate volatile transaction volumes. This could be a sign of an overvalued asset, as the on-chain transfer volume isn’t keeping pace with the market cap growth. It’s like a party where everyone shows up, but nobody brings snacks.

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2025-05-21 09:55