Ethena's governance token, ENA, experienced a remarkable surge of over 20% on Sunday, reaching its highest valuation since February. This significant price action is being driven by a substantial wave of new capital inflows and rapidly rising yields from its synthetic dollar protocol, USDe, which are collectively boosting both investor interest and price momentum.
The recent ENA rally coincides with growing traction for Ethena's synthetic dollar protocol, USDe. According to DefiLlama, the protocol has seen an impressive $750 million in inflows within a few days. With its total circulating supply now approaching its all-time high at $6.09 billion, investor appetite for USDe is clearly accelerating.
Ethena's unique strategy of backing its stablecoin with major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) while simultaneously shorting them via perpetual futures has proven highly effective recently. A significant spike in perpetual funding rates, as evidenced by CoinGlass data, has propelled investor yield on USDe to nearly 10% annually. This rate more than doubles typical traditional money market returns, drawing DeFi investors back to the protocol and, in turn, fueling demand for the ENA governance token.
While ENA's price action is currently aligning with bullish technical indicators, it is now pressing against the $0.502 resistance level. Traders are closely watching this as a potential critical breakout point. A successful push above this zone could pave the way for rapid upside, with the next resistance levels identified at $0.635 and potentially $0.767 in the medium term.
However, the path forward is not without its challenges. The order book reveals a substantial "ask wall" at $0.521, containing over 7.9 million tokens, representing more than $4.1 million in sell pressure. Clearing this immediate hurdle would offer only a modest 4.35% gain towards the subsequent resistance, making it a tight squeeze for momentum traders. Further "ask walls" at $0.530 and $0.600 could also impede any advance, with ENA needing to climb an additional 6.15% and 20.17%, respectively, after each breach to reach its next targets.
Below current price levels, immediate support for ENA can be found around $0.471, followed by $0.442 and $0.428. The most significant "bid wall" or safety net is located at $0.420, protecting the downside with over 960,000 ENA tokens. Should this critical wall break, the ENA price could experience a swift nearly 16% decline, marking a significant inflection point for short-term sentiment. While additional bid interest exists at $0.400 and $0.460, confidence in the prevailing uptrend would falter if these levels fail to hold.
For long traders, the strategy involves looking for either a confirmed breakout above $0.521 with strong volume or a dip towards the $0.471–$0.460 range as a potential reentry zone. As long as major bid walls remain intact and the Relative Strength Index (RSI) cools off gradually, the bullish thesis for ENA remains strong.Conversely, bears might consider a failed breakout at $0.502 combined with weakening Moving Average Convergence Divergence (MACD) or falling volume as an opportune moment to short, especially with potential downside targets toward $0.442 or lower. However, the presence of robust bid walls and overall strength across the broader crypto market suggest a cautious approach to betting against the current trend too early.
July 2025, Cryptoniteuae