Ethena Forms Golden Cross Indicating Potential 87% Rally in 2024

A golden cross formation on Ethena's daily chart hints at a possible major price surge for the cryptocurrency. Following a previous instance where ENA rose over 80%, the token is showing strong momentum alongside significant developments in its synthetic stablecoin, USDe.

Key Takeaways

Ethena's ENA token experienced a 16% increase, reaching a high of $0.85 on August 11.
Over the past week, ENA's price has surged over 35%, and its market capitalization is currently $5.4 billion.
The synthetic stablecoin USDe has hit a circulating supply of $10 billion, marking quick growth since its launch.
Ethereum has seen impressive gains, which historically contributes to rising values in Ethereum-related tokens like ENA.
Recent interest from Korean investors in ENA is also driving demand.

Ethena prints golden cross that preceded 87% rally in 2024

Main Content

Ethena's daily chart has recently showcased the formation of a golden cross, a technical indicator that historically leads to significant price increases. Previously, when a similar pattern was observed, ENA rallied by over 80%.

According to data from crypto.news, the ENA token surged by 16% to an intraday high of $0.85 on Monday, August 11. As a result, its weekly gains exceed 35%, while over the past 30 days, its increase has been highlighted at nearly 150%. Currently, Ethena boasts a market capitalization of $5.4 billion. Although the daily trading volume has decreased slightly, over $1.4 trillion worth of ENA has changed hands among traders.

The surge in ENA's value appears to be closely linked to a favorable shift in investor sentiment, particularly as USDe, Ethena's synthetic stablecoin, surpassed a significant benchmark of $10 billion in circulating supply. This achievement signifies a major milestone for the project, achieved within just 500 days post-launch, positioning USDe as one of the rapidly advancing stablecoins in the crypto market.

The rally of ENA is further bolstered by positive movements in Ethereum, which recently broke past the psychological resistance level of $4,000—a threshold it has struggled to surpass since December. Over the last week, Ethereum's price has grown by over 20%, significantly outpacing Bitcoin, which only rose less than 7% in the same timeframe.

Strong rallies in Ethereum typically indicate a positive outlook for Ethereum-based projects like Ethena. Given that Ethena's collateral reserves and hedging strategies rely heavily on Ethereum, the token's strong performance has positively influenced Ethena's reserves, thereby enhancing confidence in USDe’s stability. Thus, ENA generally follows Ethereum's price movements.

Additionally, growing interest from Korean markets for ENA is contributing to the demand. Observations from community members, including insights from X user Ponyo, reveal that Korean investors have been increasingly investing in Ethena in recent weeks.

“For context, CRCL was the most traded foreign stock in Korea, with ~$443 million in net buys from local investors in June alone. The demand for stablecoin plays among Korean retail investors is evident,” Ponyo stated.

In the early part of July, ENA broke out of a descending parallel channel due to rising investor demand. Since this breakout, the token has climbed more than 200%, reaching $0.81 as of the latest report.

On the daily chart, the 50-day simple moving average has now crossed above the 200-day simple moving average, leading to the creation of a "golden cross." This particular chart pattern is often interpreted as a signal of an upcoming strong uptrend. The last occurrence of this formation in late November resulted in an impressive 87% increase, pushing ENA to its peak of $1.33 in December.

Currently, the price structure mirrors that of the previous rally, suggesting a possibility of repeating that performance. If ENA replicates the rally from November in percentage terms, it could target around $1.14.

As of the latest updates, momentum indicators are pointing towards positive movement. The MACD line has crossed above the signal line, which is typically seen as a confirmation of upward momentum, indicating that buyers remain dominant in the market. The RSI also places ENA in the overbought zone following its significant gains.

Although this condition can sometimes lead to short-term pullbacks, strong growth backed by solid fundamentals can maintain overbought readings for an extended period. However, minor corrections may still occur as ENA gears up for its next upward movement.

Note: This article is for informational purposes only and should not be taken as investment advice.