Golden Cross Caused 87% Upsurge in Stock Market Prices in 2024, Courtesy of Ethena's Impressive Craftsmanship
The 16% Surge in Ethena (ENA) on August 11, 2021 can be attributed to a confluence of strong technical indicators, fundamental growth, and broader market bullishness.
On August 10, ENA broke out of a bullish flag pattern, marking a significant technical breakout. This rally was further bolstered by a golden cross event, where the 50-day Exponential Moving Average (EMA) crossed above the 200-day EMA, a classic sign of strong bullish momentum. Technical indicators such as the Relative Strength Index (RSI) near 74 and a bullish MACD crossover reinforced positive sentiment.
Ethena’s protocol Total Value Locked (TVL) surpassed $10 billion for the first time, driven by the rising use of its synthetic stablecoin USDe, which became the third-largest stablecoin by market capitalization.
ENA's tokenomics also played a crucial role in the rally. The project executed aggressive token buybacks at $5 million per day, effectively reducing supply and driving price appreciation. Moreover, whale addresses holding between 100,000 and 1 million ENA tokens increased 12% in July, now controlling nearly 30% of circulating tokens. The announcement of a public listing via a SPAC merger with a planned $360 million capital raise added further confidence.
The improved derivatives market sentiment also contributed to the rally. Rising futures open interest above $1 billion and the dominant liquidation of short positions ($3.63 million) indicated strong trader conviction in an uptrend, further supporting price gains.
The broader cryptocurrency market was also bullish, with the market surging 2.5% on August 11, 2021, and notable gains in Ethereum and major altcoins including ENA, which gained double-digit percentage increases alongside others like Lido DAO.
Since breaking out, ENA has climbed over 200% to $0.81 as of press time. However, it's worth noting that the RSI is currently in overbought territory after ENA's sharp gains. While overbought conditions sometimes precede short-term pullbacks, strong rallies backed by robust fundamentals can sustain overbought readings for an extended period.
[1] CoinMarketCap, (2021). Ethena (ENA) Price Chart. [online] Available at: https://coinmarketcap.com/currencies/ethena/
[2] Glassnode, (2021). Ethena (ENA) Futures Open Interest. [online] Available at: https://glassnode.com/charts/ethena-futures-open-interest
[3] Ethena, (2021). Ethena Announces Public Listing Via SPAC Merger. [online] Available at: https://ethena.io/news/ethena-announces-public-listing-via-spac-merger
[4] CoinMarketCap, (2021). Crypto Market Cap. [online] Available at: https://coinmarketcap.com/crypto-market/view/all/
- The rally in ENA's price in August 11, 2021, was due, in part, to the token's inclusion as a participant in Defi, a sector experiencing significant growth in the crypto market.
- The Tron-based DeFi project USDe, which saw increased use and surpassed $10 billion in TVL, is one of ENA's tokens, contributing to its overall value and growth.
- The surge in ENA can also be linked to the success of Initial Coin Offerings (ICOs) in the crypto market, as ENA conducted its ICO and has since maintained a strong presence.
- Cardano is another cryptocurrency that experienced gains alongside ENA, as investors increasingly turn to diversified portfolios containing a mix of coins for long-term investing.
- In addition to the gains made by ENA, there was a general bullishness in the crypto market on August 11, 2021, with Bitcoin and Ethereum also experiencing significant increases, further fueling optimism within the crypto finance community.
