The price of Ethena's native token, ENA, continues to trend lower, falling nearly 8% on the day and reinforcing a broader bearish structure. Despite the downtrend, underlying market positioning is beginning to show signs of a potential shift. Analysis from CryptoInsightUK points to early signs of bullish divergence on lower timeframes, indicating weakening downside momentum even as price drifts lower.
Notably, open interest has been climbing during the decline, suggesting new positions—likely short exposure—are being added rather than closed. Combined with negative premiums and fluctuating funding rates, this creates a crowded but low-conviction bearish setup. Analysts suggest this could set the stage for a short squeeze if the ENA price finds even modest strength, as elevated leverage could amplify a bounce.
Technically, ENA has returned to a historically reactive support zone near $0.20, a level from which it launched a 525% rally to $1.20 in late 2024. While the chart structure appears similar, the short-term outlook remains subdued and conditional on broader market stability. On-chain metrics provide a more constructive fundamental picture, with a growing share of USDe being staked (sUSDe), signaling increasing user trust and protocol health.
However, the primary overhang is macroeconomic risk. A potential Bank of Japan rate hike on December 19th could trigger a unwind of leveraged positions via the yen carry trade, leading to broad-based selling across risk assets like Bitcoin and altcoins. Historically, such BoJ moves have been followed by significant Bitcoin drawdowns of 20-30%, which would likely pressure ENA regardless of its technical or on-chain setup.
