Ethena Bulls Charge Toward $0.40 Breakout – But ENA’s Wings Still Need Wind

Ethena’s rally eyes a decisive push past $0.40—yet traders whisper the real test lies ahead. Can ENA’s fundamentals fuel the next leg up, or is this just another crypto pump waiting for gravity to kick in?

Market watchers note the bullish momentum but warn: without stronger adoption or protocol upgrades, even the most enthusiastic memes can’t defy tokenomics forever. After all, since when has hype alone kept a coin airborne?

Source: X

Long dominance spikes, but risk of shakeout grows

On Binance, 79.77% of ENA traders remain long, with the Long/Short Ratio reaching 3.94. This overwhelming bias creates an unbalanced market that becomes vulnerable to sudden liquidations. 

In fact, the 30th of May data showed $2.16 million in long positions liquidated, while shorts barely crossed $5K.

Therefore, while the price structure remains bullish, the aggressive positioning increases downside risk. 

Source: CoinGlass

Is sUSDe yield draining capital from legacy DeFi protocols?

As reported by AMBCrypto, Ethena’s PT tokens have surpassed $1 billion in collateralized supply within just a month, attracting significant DeFi liquidity through high-yield incentives. 

The approval of PT as accepted collateral on AAVE has intensified competition, leading to concerns of a capital shift across protocols. 

While PT adoption accelerates, Aave’s borrowing metrics show signs of stagnation. This divergence threatens protocol revenue and long-term token value for AAVE. 

For ENA, the rapid ecosystem growth serves as a potential catalyst, but it also raises questions about liquidity fragmentation in the evolving DeFi landscape.

Address activity continues to slide despite price recovery

Despite ENA’s bullish consolidation, on-chain address metrics signal weak user engagement. New Addresses declined 41.54%, and Active Addresses fell 32.77% over seven days.

This suggests that network traction is not keeping up with price performance. Without renewed participation, the current uptrend may struggle to sustain. 

Declining address activity often indicates lower organic demand and investor interest. Therefore, even if technical indicators appear favorable, weak fundamentals may delay any significant rally.

Source: IntoTheBlock

Mid-tier transactions are rising as small retail fades

Transaction data reveals a shift in participant behavior. Transfers in the $10K–$100K range surged 32.07%, and $1M–$10M transactions ROSE by 25%. 

This suggests that whales and mid-size holders remain active in ENA’s ecosystem. Conversely,

These dynamics imply conviction from strategic players, but weak grassroots participation. Sustained growth often requires a balance of both. 

For now, mid-size support offers short-term strength, but ENA needs broader involvement to ignite a full-scale trend continuation.

Source: IntoTheBlock

ENA’s derivatives market shows early signs of cooling. Derivatives Volume fell 12.81% to $827.8M, while Open Interest dropped 5.60% to $442.7M.

Traders are stepping back, possibly anticipating volatility or more liquidations.

Can ENA break out amid weak fundamentals and DeFi rotation?

Despite its promising bullish pennant, ENA faces rising uncertainty. Derivatives metrics are weakening, address activity is down, and capital appears to be flowing toward Ethena’s sUSDe yields. 

While mid-tier holders show support and long dominance remains high, overleveraged longs could become a liability. ENA must reclaim $0.38 with renewed volume and broader user growth to confirm the next bull leg.