Ethena Plummets 19%—Will This Critical Support Zone Spark an ENA Rebound?

Another day, another crypto bloodbath—Ethena (ENA) just got tossed off the cliff with a brutal 19% nosedive. But before you write the obituary, traders are eyeing one make-or-break price zone that could flip the script.

The Line in the Sand

Technical charts scream ’oversold,’ but in crypto-land, fundamentals are just decor. If ENA holds above this key level, we might see degens FOMO back in faster than a VC dumping tokens on retail.

Cynic’s Corner

Let’s be real—this ‘support zone’ could vanish quicker than a hedge fund’s promises during a bear market. But hey, in a game where hopium outperforms GDP, why not ride the bounce? Or crash trying.

Why has ENA plunged?

ENA’s recent drop has wiped out investors’ gains from the past month, with a 4.84% decline. At the time of writing, analysis indicated that this drop has been largely driven by activity in the derivatives market.

According to CoinGlass, ENA’s Open Interest Weighted Funding Rate turned negative for the first time in 10 days. That shift confirmed a bearish flip in derivative sentiment.

Source: CoinGlass

On top of that, the Long-to-Short Ratio has slipped to 0.8619—meaning sell orders have outpaced buy contracts. Such an imbalance often precedes more downside unless quickly corrected.

If these metrics continue to decline, ENA will likely face further price drops.

Liquidity inflow into ENA remains high

Notably, the decline may be nearing its end as two major bullish confluences emerge.

AMBCrypto analysis found that ENA has consistently recorded liquidity inflows, as indicated by the total value locked (TVL).

TVL represents the total on-chain value held within a protocol.

Source: DeFiLlama

Per DeFiLlama, TVL was $5.426 billion at press time, with $722 million staked or purchased in May alone.

That’s not all.

ENA recently traded into a key Fair Value Gap (FVG) demand zone—highlighted by the rectangle on the chart.

Source: TradingView

Interestingly, it reached the midpoint of this FVG demand zone, marked at $0.3044, a level that has historically triggered the start of a rally.

If momentum builds from this level, ENA could gain 34%, potentially reclaiming the $0.4080 mark.

Will this be a free rally?

Of course, upside won’t come easily.

The In/Out of the Money Around Price (IOMAP) metric showed that the rally will face resistance, with ENA likely to encounter major obstacles ahead.

The metric showed that between $0.313 and $0.327, the asset is likely to encounter heavy selling pressure, totaling 253 million ENA.

Source: IntoTheBlock

That’s a heavy resistance cluster and could prompt more sell pressure on the way up.

To add to this, the Liquidation Heatmap reveals a dense band of unfilled contracts around $0.32, setting up a potential rejection if buyers stall.