Key Takeaways
What is driving Ethena’s recent price decline?
A combination of token unlocks, falling revenue, and heavy investor sell-offs is pressuring ENA’s price.
How have investor actions impacted Ethena’s market performance?
Net outflows of $5.72 billion and declining inflows have weakened Ethena’s TVL and overall market sentiment.
Ethena [ENA] has recorded a significant decline in the market, with the asset dropping by 10% during this period.
Investors in the market appear to be catching on to the growing bearish trend, increasing the possibility of the asset sweeping even lower on the chart.
$5.7B sales affect ENA!
On-chain sentiment shows a gradual lack of interest growing among investors. A 30-day timeframe indicates that investors have continued selling their assets across exchanges as they unlock their tokens.
Between the 11th of October and the 12th of November, total net outflows reached $5.72 billion, affecting Ethena’s Total Value Locked (TVL). At press time, Ethena’s TVL was valued at $8.581 billion.
Source: DeFiLlama
Understandably, AMBCrypto traced this significant decline to a sharp drop in Ethena’s earnings. To put this in perspective, ENA’s average daily earnings in the third quarter fell from $109,462 to just $8,987 so far in the fourth quarter of this year.
This indicates that Ethena’s profitability has been underwater as investors continue to withdraw funds from the market.
Maria Carola, CEO of StealthEx, noted that macroeconomic factors have shaped ENA’s earnings and warned that the situation could worsen.
“Until inflation indicators and the Federal Reserve’s policy guidance offer clearer direction, high-beta assets like ENA are likely to remain under near-term pressure.”
Unlocks and falling revenue pressure ENA
Ethena’s recent price decline stems from mounting bearish pressure in the market.
On the 8th of November, the protocol unlocked tokens worth $4.56 million, 0.2% of its circulating supply, while continuing its S3 Airdrop, which distributes roughly $149,858 daily.
These unlocks have added selling pressure at a time when the broader market is still recovering.
Meanwhile, Ethena’s protocol revenue has also seen a sharp drop, further contributing to the downward momentum.
Source: DeFiLlama
Recent reports show that Ethena’s revenue has tanked alongside its valuation, recording just $1,817 in the past day and $11,849 over the past seven days.
A decline in protocol revenue is typically an early sign of reduced activity from users. Fewer users in the market simply mean the protocol generates less revenue as on-chain activity drops.
Artemis data shows that transactions have declined to 24,500 within this period.
Inflows drop as spot selling rises
DeFiLlama reports that USD inflows into ENA have fallen sharply, plunging to a negative $46 million, confirming the sell-off trend among on-chain investors.
This isn’t isolated, as spot investors are also beginning to sell off their ENA holdings. The total net flow shows $569,000 in withdrawals from centralized exchanges.
Source: DeFiLlama
This marks one of the few periods in which ENA has recorded weekly outflows. The average sell-off across the four major instances of ENA liquidation shows that $3.915 million worth of the asset was sold.
This suggests that if sellers continue to dominate the market, total sell-offs could reach similar levels, adding even more pressure to ENA’s market outlook.
