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Ethena (ENA) Hits Key Support Level Amid Significant Correction: Is A Reversal Ahead?


Date: Sun, Jan 12, 2025, 11:06 AM GM

The cryptocurrency market continues to face bearish pressure this month, with Bitcoin (BTC) recently experiencing a sharp dip from $102K to a low of $91K, before stabilizing near $94K. The rapid rise in BTC dominance to 58% has intensified the bearish momentum across the altcoin market.

Among the impacted tokens, Ethena (ENA) has seen a sharp 27% drop in the past 7 days, erasing the major gains it made following bullish news of Donald Trump’s World Liberty Financial buying ENA.

Ethena (ENA) Price
Source: Coinmarketcap

However, amid this correction, ENA is now testing critical support levels, which could be pivotal for its next move.


Key Support Levels

Ethena (ENA) has been in a sustained downtrend since its rejection at $1.30 on January 5th. The correction brought ENA from $1.30 down to $0.88, entering a significant support zone between $0.85 and $0.92.However, ENA has managed to hold this level and is currently trading at $0.91.

Ethena (ENA) 4H Chart
Ethena (ENA) 4H Chart/ Coinsprobe (Source: Tradingview)

If ENA successfully defends the current support level, a rally toward $1.13 or even a retest of the $1.30 resistance level could be on the cards. However, a failure to hold above $0.85 may lead to further declines, with the next major support resting at $0.76.

Several indicators hint at a possible reversal. The MACD shows weakening selling momentum, while the RSI near 35 suggests oversold conditions, often signaling a potential rebound.


Analyst Insights

Prominent crypto analyst @MikybullCrypto shared insights on ENA’s current technical outlook, highlighting that the token is sitting at a critical support zone. According to the analyst, this support, combined with the TD Sequential buy signal flashing on the daily ENA/BTC chart, could act as a springboard for a recovery.

Ethena (ENA) Chart
ENA/BTC Chart/ Source: @MikybullCrypto (X)

However, the next few days will be crucial in determining whether ENA sustains this level or continues its downtrend.


Is A Reversal Ahead?

While the technical indicators suggest the possibility of a reversal, the broader market conditions will likely influence ENA’s price action. Bitcoin’s stability and dominance, along with renewed altcoin interest, could boost ENA in the short term. On the other hand, continued bearish sentiment could push the token lower.

Investors should monitor the $0.85 support level closely as a breakdown here could indicate further downside risks, while a bounce might signal a trend reversal.


Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research and consult with a professional before making investment decisions.


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