Ethena's price keeps rising from July 5, and increases momentum from Monday. Will BlackRocks proposal ignite a major rally?
Key Takeaways
- Ethena is proposing to invest $500 million into tokenized U.S. Treasury bills.
- ENA could reach a potential yield of around 5% if the proposal is accepted
- BlackRock’s interest boosted market confidence in ENA.
On July 24, Ethena surged by over 12%, rising from $0.44 to nearly $0.50, continuing its upward trend from the previous day and totaling a 20% increase.
What’s the reason behind this sudden increase, and can the price of ENA continue to rise?
What Drove The Rise?
Ethena’s recent price surge appears to be influenced by significant developments involving BlackRock and other major financial entities.
On July 16, the Ethena Foundation proposed allocating its treasury funds to real-world assets as part of a new RWA investment plan to further collateralize its synthetic stablecoin USDe.
On Monday, July 22, Securitize, representing BlackRock’s BUIDL fund, pitched a proposal to the Ethena Foundation, suggesting to invest $34 million of Ethena’s reserves into tokenized U.S. Treasury bills. The investment is intended to provide a stable yield of around 5% and diversify Ethena’s holdings into real-world assets (RWAs). This option is particularly appealing as it offers a low-risk way to generate returns for Ethena’s reserve assets.
Other firms, including Steakhouse Financial , have also shown interest in investing in Ethena’s reserve assets, further validating the platform’s potential.
These developments mark a significant step in integrating traditional finance with decentralized finance (DeFi), demonstrating the growing trust and interest in blockchain-based financial solutions. The involvement of major financial players highlights the potential for stablecoins like USDe to serve as reliable, yield-generating assets in the broader financial ecosystem.
ENA Price Analysis
ENA’s price peaked at an all-time high of $1.52 on April 11 but has since been in a bear cycle. By July 5, ENA had dropped to $0.35, marking a 77% decline. However, the price has since shown signs of recovery.
On July 20, ENA briefly tapped the $0.50 level and revisited it on July 24. As the price approaches a descending resistance level, two potential scenarios could unfold.
If the recovery since July 5 signifies the beginning of a new bullish phase, ENA is likely to break through the resistance level. This breakout could initiate the formation of a five-wave pattern, signaling the end of the prolonged bear market. In this case, ENA could reach a new high of $0.62 before pulling back to test the broken resistance as support, potentially continuing its upward trajectory.
Alternatively, if the current resistance level rejects ENA’s attempt, the recent rise might be a three-wave move, indicating that ENA has yet to complete its bearish phase. This could lead to a further decline, potentially dropping to $0.25 before a new bullish phase begins.
Given the analysis of the four-hour chart’s RSI and MACD, combined with the fundamental factors driving the recent price increase, the bullish scenario appears more probable.
ENA Price Up 70% Since Launch Despite Andre Cronje Ethena Risk Warnings
