Key Takeaways
Announcement of the ENA treasury company saw the price climb past the $0.5 resistance level. The daily buying, combined with the market demand, could be enough to drive the rally even higher in the coming weeks.
Ethena [ENA] announced the formation of a new Ethena treasury company, StableCoinX Inc. recently. In a post on X, Ethena Labs explained that they have raised $360 million to purchase ENA. They will also seek to list their stock on Nasdaq under the symbol USDE.
Starting on Monday, 21 July, $5 million worth of ENA will be bought daily over the course of the next six weeks. At its press time price, Ethena Labs noted that $260 million represented 8% of the total circulating supply. The announcement also read,
“Importantly, the Ethena Foundation has the right to veto any sales of $ENA by StableCoinX at its sole discretion. Ideally, tokens will never be sold with a sole focus on accumulation.”
The StableCoinX treasury strategy focuses on a deliberate, multi-year capital allocation approach. This is hugely bullish news for ENA. Especially since it managed to clamber past a resistance zone that has been in play since February.
ENA conquers psychological $0.5 resistance
Source: ENA/USDT on TradingView
The A/D indicator rose past a local high from July, and the CMF was above the +0.05-mark. This underlined strong demand for Ethena and significant capital inflow into the market. Additionally, the daily trading volume bars have been well above the 20-day moving average over the past ten days.
The Awesome Oscillator showed hefty bullish momentum too. The 1-day market structure was firmly bullish as well. At press time, the altcoin seemed no longer constrained by the $0.5 resistance.
Its repeated meandering between $0.5 and $0.25 since April highlighted a range formation and a consolidation phase. This has since given way to a bullish trend on the charts.
The 1-week liquidation heatmap revealed that there was a chance of a price retracement to the $0.45-$0.47 zone. This may be the closest magnetic zone of a considerable size.
It coincided with the resistance from February. A retest of the former supply zone may be coming, as demand would offer a good buying opportunity. Finally, investors should be aware of potential volatility around Bitcoin [BTC].
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
