Why Ethena is Pumping: Could It Surge by 35%?

Ethena has seen a remarkable surge in its value recently, with the token reaching a high of $1.20, its highest point since April of this year. This surge represents a massive increase of 525% from its lowest point earlier in the year, pushing its market capitalization to over $3.36 billion. The rally has captured the attention of investors and analysts alike, with several factors contributing to its impressive price movement.

One of the main catalysts for Ethena’s price surge is the significant investment made by World Liberty Financial (WLFI), a company backed by Justin Sun, the founder of Tron (TRX). WLFI accumulated 509,955 ENA tokens, valued at over $589,000, which provided a major boost to the market’s confidence in Ethena. This investment is part of a broader strategy by WLFI, which has also raised over $72 million in a token sale, showing its strong backing and commitment to the platform. Additionally, WLFI holds a diverse portfolio of digital assets, including Ethereum, Tether, USDC, Chainlink, and AAVE, which further supports the legitimacy of Ethena’s growth.

Another significant factor driving the price of Ethena is the remarkable growth of its Total Value Locked (TVL), which has surged to over $5.84 billion. This increase in TVL has played a crucial role in boosting the value of USDe, the yield-earning stablecoin within the Ethena ecosystem. Over the last 30 days, USDe’s valuation has jumped by 83%, propelling it to become the third-largest stablecoin in the market, following Tether and USDC. This strong performance of USDe has attracted more investors to the platform, further boosting Ethena’s overall market sentiment.

Ethena’s recent price rally has also been influenced by the growing confidence in USDe, its algorithmic stablecoin. While some algorithmic stablecoins like Terra USD (UST) have struggled with de-pegging issues in the past, USDe is showing much stronger signs of stability. According to predictions from Polymarket, the likelihood of USDe falling below 90 cents in 2024 is just 2%, significantly reducing the risk of de-pegging. This has calmed investors’ concerns and contributed to a more positive outlook for Ethena’s future.

From a technical analysis perspective, Ethena is demonstrating a strong bullish trend. The token has been consistently trading above both its 50-day and 25-day Exponential Moving Averages (EMAs), which signals that the bulls are firmly in control. The chart also shows the formation of a classic cup and handle pattern, a well-known bullish continuation pattern. The upper resistance level of this pattern is at $1.5210, which represents a potential upside of about 33% from the current price of $1.20. If the price continues to follow the pattern, Ethena could see further gains in the coming weeks, with the potential to reach this target.

In conclusion, Ethena’s surge in value can be attributed to several factors, including strategic investments, increasing Total Value Locked, the positive performance of its stablecoin USDe, and strong technical indicators. The involvement of World Liberty Financial and Justin Sun has brought significant attention to the project, while the rising TVL and confidence in USDe’s stability further support the growth narrative. As Ethena continues to perform well in the market, there is growing optimism about its potential to reach new highs and possibly surpass its previous all-time highs. If these trends continue, Ethena could see significant upward momentum, with the possibility of a 35% surge in the near future.