Ethena’s price risks a 37% crash as the Death Cross looms

Ethena price has fallen nearly 40% in the past two weeks and appears headed for further losses as it approaches a bearish death cross pattern.

According to data from crypto.news, Ethena (ENA) is down 20% in the last seven days and almost 100% since its September high. The altcoin was trading at $0.31 last check on Friday afternoon Asian time, losing its market capitalization from $3.7 billion to $2.3 billion at the time of writing.

Ethena price saw a small rebound on November 6 after US-based popular trading platform Robinhood announced the mention of the token. However, it quickly returned to its downward trend of 171.88 million unlock tokenworth about $54.88 million a day earlier, continued to put pressure on prices. Notably, the unlock event took place right after another $15.7 million unlock on November 2.

Token unlocks like these add more tokens into circulation, reduce scarcity, and tend to depress prices, especially when overall market activity is muted.

Following the latest unlock, there are currently 7.42 billion tokens in circulation, and approximately 70% of this supply is still in the hands of early investors and Ethena team members. As such, investors are likely to remain cautious about potential profit-taking.

At the same time, data from Nansen suggests that whales also played an important role in driving Ethena’s decline. The total balance of tokens held by whale addresses has fallen from 65.24 million on October 31 to 43.06 million at the time of writing. Whale sell-offs often cause panic among retail traders, who tend to follow suit, amplifying downward pressure on related assets.

Ethena’s price has been largely in a downtrend since September 9 and continues to trade within what appears to be a descending parallel channel. In technical analysis, a parallel channel is a pattern where price fluctuates between two downtrend lines, indicating consistent bearish momentum.

As long as the price respects this pattern, it will likely continue to decline.

The Supertrend indicator flashed red as it moved above the price line, a telltale sign of growing bearish sentiment.

More importantly, the 50-day SMA looks set to cross below the 200-day SMA and form a death cross, a historically bearish pattern that often points to deeper losses.

However, the RSI is hovering around 32 and is close to the oversold threshold. As such, there may be a near-term recovery before the ongoing downtrend resumes.

As it stands, Ethena appears to be at risk of further losses up to $0.197, which is 36% below the current price level, a zone last seen in September 2024.

On the contrary, a sustained recovery above the 200-day SMA at $0.47, which is also closely aligned with the 38.2% Fibonacci retracement level, would likely signal a break from the bearish setup and open the door for a more bullish reversal.