Ethena Bullish Cues Could Help ENA Price Rally 87%

PATNA (CoinChapter.com)— Ethena’s synthetic dollar, USDe, has shown remarkable growth recently, helping the platform’s native token, ENA, register impressive gains since May 15. Moreover, the Ethena token might have more bullish cues coming from the success of the project’s stablecoin.

The ENA price spiked by more than 35% since May 15 to reach a daily high near $0.883 on May 21. The increase suggests traders are noticing the project and the team’s efforts to expand its ecosystem.

Bullish Cues for Ethena

Ethena’s strategy targets disrupting the stablecoin market. USDe’s swift growth underscores strong market acceptance and potential for continued expansion. Ethena democratizes access to delta-neutral basis trades, addressing the market’s appetite for yield.

USDe leverages high-yield sources like staked ETH and perpetual futures funding rates, which consistently outperform traditional finance yields.

Moreover, USDe scaled from zero to over $2.5 billion on May 21, making it the fastest-growing stablecoin ever. Additionally, the rapid ascent of Ethena’s stablecoin highlights the project’s potential in a market dominated by Tether and Circle.

Ethena’s delta-neutral approach requires only $1 of collateral to mint 1 USDe, making it more capital-efficient than collateralized debt positions (CDPs) like DAI.

Integrating DeFi protocols like MakerDAO and Pendle enhances Ethena’s utility and paves the way for broader institutional adoption. Furthermore, such partnerships might end up becoming a bullish cue for the

MakerDAO’s recent actions, such as raising the DAI savings rate and increasing the DAI cap for Spark’s sUSDe/DAI and USDe/DAI markets, reflect growing institutional confidence in Ethena. Moreover, increased investor interest could add to the bullish cues favoring the Ethena token.

Ethena’s scalability stands out. By utilizing both ETH and BTC as collateral, USDe can scale to a market cap exceeding $7.2 billion, generating significant annual earnings. Even in conservative scenarios, Ethena remains one of the most profitable crypto protocols.

Ethena also reconciles yields across DeFi, CeFi, and TradFi. This erodes the “inaccessibility premium” in CeFi rates, positioning USDe as a tokenized arbitrage vehicle. Ethena’s strategic alignment with other protocols has allowed USDe to proliferate quickly, adding to the bullish cues favoring the ENA token.

ENA Breaks Out Of Bullish Formation

Meanwhile, the recent rally has helped ENA price break out of a bullish technical pattern called the ‘falling wedge.’

The breakout could add to the bullish cues favoring the Ethena token.

A falling wedge pattern features a pair of converging trend lines connecting lower highs and lower lows, forming a narrowing shape that slopes downward.

The pattern typically suggests that an asset’s price, while consolidating in a downtrend, is losing bearish momentum and preparing for a potential reversal to the upside. Typically, a breakout occurs in the direction of the overall trend, which, for a falling wedge, is upward.

To estimate the price target of a falling wedge pattern, traders measure the widest part of the wedge at the beginning of the formation. They then project this distance upward from the point of the breakout to set a potential target.

An accompanying increase in trading volume can further confirm the reliability of the breakout. Higher volume during the breakout suggests stronger market conviction, supporting the likelihood of a successful price reversal.

According to the rules of technical analysis, ENA price could rally over 87% to reach the pattern’s theoretical price target near $1.61. However, the Ethena token price needs to confirm the breakout to attract more buyers to the market.

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