- Ethena recent price rally looks promising on the surface, but key on-chain metrics hint at ongoing distribution and weak long-term investor confidence.
- Despite bullish momentum, ENA may be overvalued and not yet ready for a sustained breakout.
Ethena [ENA] has caught the attention of traders following a breakout from its descending channel and a break in market structure on 10 May. This rally, which pushed ENA past the $0.35 mark, appeared to signal renewed bullish momentum, especially as the altcoin sector basks in Bitcoin‘s glow. However, a closer look at on-chain data reveals reasons for caution.
While the price action on the 1-day chart appears promising—backed by increased trading volume and an OBV (On-Balance Volume) breakout—the deeper metrics paint a more complex picture. The Relative Strength Index (RSI) continues to show strong buying pressure, but this might be misleading when placed alongside other network indicators.
Also read: FARTCOIN Price Prediction: Can It Break Bearish Pressure and Rally 21%?
Ethena’s daily active addresses have remained consistently strong over the past three weeks, peaking on 9 May. This might suggest growing interest, but the broader metrics like Mean Coin Age (MCA) tell another story. Since February, MCA has been on a downtrend, signaling that older coins are being moved or sold rather than held—often a sign of network-wide distribution rather than accumulation.
Additionally, the MVRV (Market Value to Realized Value) ratio points to mild losses for long-term holders. With 180-day holders seeing a 14.5% dip, investor confidence may be weaker than surface-level price movements suggest. Further compounding this concern is the Network Value to Transactions (NVT) ratio, which has shown elevated readings at intervals, hinting at an overvaluation due to disproportionate transaction volumes compared to market cap.
In short, while ENA’s recent rally and breakout offer short-term optimism, the token’s on-chain fundamentals suggest that this move might lack the depth needed for a sustained uptrend. The market could still be in a late-stage distribution phase, and long-term buyers may want to tread carefully.
As always, momentum in the crypto market can change swiftly—but Ethena’s under-the-hood data is a reminder that not every breakout is built on strong foundations.
