ENA, the native token of Ethena, a prominent Ethereum-based synthetic dollar protocol, has experienced a notable downturn in the market within the last 24 hours. Trading at $0.42, the altcoin has seen a significant drop of over 10% during this period.
This decline can be attributed to a major ENA stakeholder, identified as wallet 0x8f9, who recently unstaked their entire holding of 17.875 million ENA, valued at $8.78 million, and transferred it to the popular crypto exchange Binance.
The actions of this ENA whale have sparked concerns of a potential selloff among traders. Spotonchain, an on-chain analysis platform, revealed that this whale had acquired ENA at an average price of $1.167, primarily during peak price periods. With the current trading price at $0.43, selling at this level would lead to significant losses for the whale.
Large transfers of tokens by influential whales to exchanges often indicate a looming market selloff, resulting in increased supply and price depreciation. This may prompt bearish sentiments among traders, leading to heightened volatility and further price drops.
The prevailing negative funding rate linked to ENA underscores the prevalent bearish sentiment surrounding the token, standing at -0.012% according to Coinglass.
Funding rates play a critical role in aligning the price of an asset's contract with its spot price by facilitating periodic payments between long and short traders in perpetual futures contracts. A negative funding rate suggests a dominance of short positions, indicating strong bearish sentiment and a potential short squeeze risk in case of a sentiment shift.
Currently trading at a three-month low of $0.42, ENA is under substantial selling pressure. The possibility of whale 0x8f9 offloading their significant ENA holdings on Binance could further drive down the price, potentially breaking the $0.41 support level and sliding towards $0.31.
While this selling pressure looms, an increase in overall demand for ENA could counterbalance the whale's potential exit, leading to a bullish momentum that might propel the token's price to $0.51.