Analyst Explains Why Retail Investors Should Stay Away From Ethena (ENA)

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Analyst Explains Why Retail Investors Should Stay Away From Ethena (ENA) – Crypto News

Published

9 months ago

March 10, 2025

Dripp

Ethena (ENA) has gained significant traction ever since its launch, but its price performance gains excitement and skepticism simultaneously. Considerable concerns exist as the token has not created a new ATH in a year. Adding to the skepticism, one crypto analyst warns the retail investors to stay away from this altcoin. Why? Let’s discuss this.

Analyst Reasons Why Ethena Is a Risky Investment

Apart from Ethana’s price performance, the most significant concern is high valuation. Crypto analyst ‘DeFi Mochi’ claims that the ENA’s fully diluted valuation (FDV) stands at a staggering $6.7 billion, whereas early investors got in at an average FDV of just $82 million. This means the early investors are already making 72x despite the current crypto market crash.

Although this is an impressive point, there’s a high risk of sell-off, putting retail investors at risk of losing everything. This is because their trade could excite liquidity for early adopters, as they would rush to take profits.

Another critical point or red flag is that there’s high Venture Capital (VC) dominance, making it vulnerable to sell off again. In addition, the ENA token unlock is another factor to consider.

Just a few days ago, 2.07 billion tokens were unlocked, and 937.5 million tokens will be released on April 2, 2025, which could lead to significant downward pressure on the ENA price.

Based on these points, crypto analysts advised new investors to stay cautious about this altcoin’s price performance.

How’s Ethena Price’s Performance Today?

After a significant recovery, the Ethena price gained bullish momentum. It trades at $0.4499, with a 24-hour volume of $436.92 million, showing a high demand among investors. Although the token is handling the market turbulence quite well, it is 70% away from its ATH of $1.52, set a year ago.

Looking at its derivative data, long positions are clearly dominant, as the traders are betting on the ENA price rally. However, its volatility is high as its holders faced high liquidation amid the crash.

Will ENA Price Rally Continue?

The future price outlook for ENA remains uncertain as there’s high volatility. A few analysts believe that the token’s crucial support is $0.46, and if it falls below, it will retest between $0.42 to $0.44, the current levels.

Once it breaks out above $0.50, it can lead to an uptrend toward $0.55 and higher toward $0.60. However, that would require a jump from the current levels, especially as the recent 2.07 billion unlock could introduce additional volatility.

Investors must cautiously track the Ethena price trajectory and market trend before jumping into any decision.

Frequently Asked Questions (FAQs)

Analysts highlight concerns over ENA’s high valuation, heavy VC dominance, and frequent token unlocks, which could result in price volatility and sell-off.

Ethena is trading at $0.4499 with a 24-hour volume of $436.92M, showing high investor interest.

Ethena has crucial support at $0.46, with the potential retest between $0.42 and $0.44.