Will a rounding bottom breakout rally drive the Ethena (ENA) market price up by 400% to $4.91?
As Bitcoin crosses the $100k milestone, Ethena is emerging as a top performer and is gradually gaining momentum. With the broader market sentiment turning extremely bullish, Ethena has surged 12.61% over the past 24 hours.
This drives the 7-day price rally to 34.22%, with the market price inching closer to the $1 psychological mark. Will the $1 breakout rally result in a massive surge of 400% for Ethena?
Ethena Price Analysis
The ENA price action on the daily chart reveals a rounding bottom reversal pattern. The recovery rally has reached the neckline, coinciding with the 78.60% Fibonacci level at $0.9595.
The Ethena token is currently trading at a market price of $0.9631, with an intraday gain of 5.71%. This marks the second consecutive bullish candle, testing the overhead supply zone.
The supply zone above the 78.60% Fibonacci level extends from $0.96 to $1.03. The recovery rally has influenced a bullish crossover between the 50- and 200-day simple moving average lines.
Furthermore, the rising 100-day SMA line is closing the gap with the 200-day SMA, teasing a new bullish crossover. A positive alignment in the simple moving average lines will significantly improve the underlying sentiment for Ethena. Hence, the chances of an extended rally are increased.
Furthermore, the daily RSI line has entered the overbought territory at 76.18%. This warns of a potential retest, which might come after the bullish breakout. Using the Fibonacci retracement level, the rounding bottom breakout rally will likely challenge the 100% Fibonacci level at $1.46.
Ethena Price Targets
Based on the rounding bottom pattern, the price target is calculated using the distance between the bottom’s depth and the neckline. The neckline on the daily chart represents the price range, which points to the 1.618 Fibonacci level at $4.91 as the potential peak.
Therefore, the price action analysis and Fibonacci levels suggest a 400% potential surge for Ethena. In case of a bearish failure, a reversal from the 78.60% Fibonacci level could test the crucial immediate supply zone near $0.69.
Ethena Driving Factors
In a recent tweet, Ansem highlighted several factors driving the Ethena rally. The USDe total volume locked, nearing $5 billion, is a critical catalyst. Furthermore, the stablecoin offers a payout of nearly 30% APY.
Additionally, the backing of Franklin Templeton and Fidelity is likely to increase traditional finance’s participation in this trade. The analyst also notes Tether’s and USDC’s current market caps of $135 billion and $40 billion, respectively.
Given that USDe may likely reach a similar valuation, the ongoing bull run may well support the 400% projected rally in Ethena.
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