How Will ENA Token Prices React? Ethena to Unlock $728M on March 5

Ethena’s upcoming ENA token unlock, set for March 5, 2025, is poised to introduce a significant change to the market dynamics of the token. The release of 2.07 billion ENA tokens, worth approximately $728 million, will increase the circulating supply of ENA by a large margin. With this unlock, approximately 66.19% of Ethena’s total token supply will be brought into circulation, which can be a major factor influencing its market price. Currently, ENA has around 3.13 billion tokens in circulation, with a total market capitalization of $1.08 billion.

In the short term, the large influx of ENA tokens into the market is expected to exert substantial downward pressure on the token’s price. ENA has already seen a drop of 18% in the past 24 hours, and with the new tokens coming into circulation, further price declines are a possibility. Currently, ENA is trading at $0.3476, and this downtrend is being reinforced by a notable increase in trading volume, particularly dominated by red candles, signaling strong selling pressure.

Additionally, the recent behavior of the token in terms of its technical indicators suggests continued bearish momentum. The 9-day Exponential Moving Average (EMA) is acting as a resistance level, preventing any upward movement in price. This could indicate that the token may continue to face difficulty breaking out of its current downtrend, especially given the new tokens entering circulation.

One factor to keep in mind is the Relative Strength Index (RSI) of ENA, which currently stands at 36.85. This places the token near the oversold area, suggesting that there may be some potential for a price reversal or a short-term bounce if the selling pressure subsides. However, no clear reversal signals have appeared yet, and the price remains firmly within a bearish trend.

Another point to consider is the failed breakout attempt near the $0.4836 level. The resistance at this level combined with the influx of new tokens from the unlock has made it difficult for ENA to sustain upward momentum. If the price of ENA continues to fall and breaches the $0.3476 support level, it could signal further declines, potentially pushing the price to new lows.

On the other hand, if ENA can maintain support around the current level and manage to break above the immediate resistance at $0.4028, this could mark the beginning of a recovery. A high-volume reclaiming of this level would be seen as a potential indicator of a more significant price reversal, although this would still require considerable market momentum to play out.

In the medium to long term, Ethena’s broader project vision might provide a more optimistic outlook for ENA. Ethena is working to build a decentralized, crypto-native alternative to traditional banking. With its Ethereum-based synthetic dollar system, USDe, Ethena is positioning itself as a major player in the stablecoin space, already ranking as the fourth-largest stablecoin by market cap at $5.4 billion. The introduction of institutional-focused products like iUSDe, which is designed for institutional investors, further positions Ethena for long-term success.

Moreover, Ethena is planning to launch its blockchain, which may provide additional utility and demand for the ENA token. The long-term prospects of ENA depend on how well these future developments unfold and how effectively the platform can drive adoption of its ecosystem.

However, in the short term, the price movement of ENA is heavily influenced by the token unlock and the resulting increased supply. Investors and traders will need to monitor the market carefully for signs of stabilization or further selling pressure. Once the effects of the token unlock are priced in, ENA may begin to find its footing if it can attract more demand due to the ongoing developments in the Ethena ecosystem.

The price of ENA is likely to remain volatile in the near term as it adjusts to the unlocked supply, with the possibility of further declines if market sentiment remains negative. However, the technical indicators, market sentiment, and the long-term development trajectory of Ethena’s ecosystem could all play crucial roles in shaping ENA’s future price action.