Ethena (ENA) doubles as whales pile in, yields top 10%

Ethena price jumped for six consecutive days, reaching its highest level since March as inflows into the ecosystem and whale accumulation continued.

Ethena (ENA) token soared to a high of $0.4617, up by 110% from its lowest level this year. This surge, which happened in a high-volume environment, pushed its market capitalization to nearly $3 billion. 

Ethena’s growth happened as investors continued to allocate their capital into its algorithmic stablecoins. DeFi Llama data shows that the total value locked in its platform soared to over $6.17 billion, crossing the previous all-time high of $6.1 billion. 

Most of these assets are in USDe, its algorithmic stablecoin that has over $6 billion. The remaining funds are in Ethena Labs USDtb, which has over $159 million in assets. 

The USDe assets jumped as the annual percentage yield crossed the 10% milestone for the first time this year. This makes it a more yield-generating asset compared to other cryptocurrencies.

Still, it is unclear whether the USDe stablecoin will be offered in the U.S. after President Donald Trump signed the GENIUS Act into law on Friday. 

One of the core provisions of the law is that all stablecoins offered in the US should be backed 1:1 with US dollars and other liquid assets like government bonds. 

These assets do not back Ethena’s USDe. Instead, like the collapsed Terra USD, the stablecoin uses a delta-neutral algorithmic strategy to maintain its price of $1. It works by ensuring that the collateral is paired with an equivalent short position of a perpetual contract.

If the USDe falls below $1, arbitrageurs can profit by minting or redeeming USDe, pushing it back to $1. The sUSDe then generates yield by a combination of staking rewards and funding rate from the delta-neutral strategy. 

The ENA price is also rising as whales continue to buy. Nansen data shows that whales hold 43.6 million ENA tokens, a 14.6% increase over the last 30 days, while the exchange balances have fallen to 7.27 billion. 

Ethena price analysis

The daily chart indicates that the ENA price has experienced a strong recovery over the past few days. It crossed the important resistance level at $0.4615, the highest swing on May 14, confirming that bulls are in control.

Ethena’s price is now targeting a move above the 23.6% retracement level at $0.4841. Its 50-day and 100-day Exponential Moving Averages are also nearing their crossover. 

Therefore, the token is likely to continue rising as bulls target the 50% retracement level at $0.7758, which is approximately 70% above the current level.