Market Amplifier ---- ENA
After losing the chance to break ATH, BTC continued to lead the market lower. Almost all altcoins have entered a downward channel.
Today we will talk about ENA (Ethena), which is a meaningful project. Ethena is building derivative infrastructure to enable Ethereum to transform into the Global Internet Bond via delta-neutral positions on stETH, to create the first crypto-native, yield bearing stablecoin: USDe.
The long position of USDe captures the income from the ETH staking return, while the short position captures the income from the ETH funding rate. During a bull market, funding rates are generally paid by longs to shorts. Under such a structure, USDe’s gains reached 30%+ at the beginning of this year. The upward spiral structure in the bull market has led Ethena to be called a market amplifier, and has been compared to Luna.
But when the market turns bearish, short sellers begin to pay funding rates, covering the ETH staking income and generating losses. In order to avoid losses, Ethena established a Reserve Fund and used part of its income to resist funding rate expenses when the market fell. So although BTC fell below 63,000 yesterday, USDe's APY is still greater than 10%.
USDe’s current supply reaches 160 million, ranking fourth among stable coins. But the daily trading volume is less than $30 million. In contrast, FDUSD, which ranks fifth on supply, although its market value is lower than USDe, has a daily trading volume of nearly 1.12 billion US dollars. Therefore, Ethena needs to find more cooperation to solve the utility of USDe. In this way, USDe can be converted from an investment certificate to a stable tokens.
It can also be seen from the price trend of ENA that the issue of utility is the most important. So USDe’s APR did not avoid ENA’s decline. At the 4h level, the TSB indicator prompted a SELL signal on June 8, and then ENA was in a downward channel again. Wavy areas provide resistance.
In summary, we believe that Ethena temporarily lacks utility, and the market uses USDe more as investment certificates. The utility issue is being resolved and BTC is rising again. Then the role of the market amplifier will also be reflected in the price of ENA.
Introduction to indicators:
Trend Sentinel Barrier (TSB) is a trend indicator, using AI algorithm to calculate the cumulative trading volume of bulls and bears, identify trend direction and opportunities, and calculate short-term average cost in combination with changes of turnover ratio in multi-period trends, so as to grasp the profit from the trend more effectively without being cheated.
KDMM (KD Momentum Matrix) is not only a momentum indicator, but also a short-term indicator. It divides the movement of the candle into long and short term trends, as well as bullish and bearish momentum. It identifies the points where the bullish and bearish momentum increases and weakens, and effectively capture profits.
Disclaimer: Nothing in the script constitutes investment advice. The script objectively expounded the market situation and should not be construed as an offer to sell or an invitation to buy any cryptocurrencies.
Any decisions made based on the information contained in the script are your sole responsibility. Any investments made or to be made shall be with your independent analyses based on your financial situation and objectives.
Today we will talk about ENA (Ethena), which is a meaningful project. Ethena is building derivative infrastructure to enable Ethereum to transform into the Global Internet Bond via delta-neutral positions on stETH, to create the first crypto-native, yield bearing stablecoin: USDe.
The long position of USDe captures the income from the ETH staking return, while the short position captures the income from the ETH funding rate. During a bull market, funding rates are generally paid by longs to shorts. Under such a structure, USDe’s gains reached 30%+ at the beginning of this year. The upward spiral structure in the bull market has led Ethena to be called a market amplifier, and has been compared to Luna.
But when the market turns bearish, short sellers begin to pay funding rates, covering the ETH staking income and generating losses. In order to avoid losses, Ethena established a Reserve Fund and used part of its income to resist funding rate expenses when the market fell. So although BTC fell below 63,000 yesterday, USDe's APY is still greater than 10%.
USDe’s current supply reaches 160 million, ranking fourth among stable coins. But the daily trading volume is less than $30 million. In contrast, FDUSD, which ranks fifth on supply, although its market value is lower than USDe, has a daily trading volume of nearly 1.12 billion US dollars. Therefore, Ethena needs to find more cooperation to solve the utility of USDe. In this way, USDe can be converted from an investment certificate to a stable tokens.
It can also be seen from the price trend of ENA that the issue of utility is the most important. So USDe’s APR did not avoid ENA’s decline. At the 4h level, the TSB indicator prompted a SELL signal on June 8, and then ENA was in a downward channel again. Wavy areas provide resistance.
In summary, we believe that Ethena temporarily lacks utility, and the market uses USDe more as investment certificates. The utility issue is being resolved and BTC is rising again. Then the role of the market amplifier will also be reflected in the price of ENA.
Introduction to indicators:
Trend Sentinel Barrier (TSB) is a trend indicator, using AI algorithm to calculate the cumulative trading volume of bulls and bears, identify trend direction and opportunities, and calculate short-term average cost in combination with changes of turnover ratio in multi-period trends, so as to grasp the profit from the trend more effectively without being cheated.
KDMM (KD Momentum Matrix) is not only a momentum indicator, but also a short-term indicator. It divides the movement of the candle into long and short term trends, as well as bullish and bearish momentum. It identifies the points where the bullish and bearish momentum increases and weakens, and effectively capture profits.
Disclaimer: Nothing in the script constitutes investment advice. The script objectively expounded the market situation and should not be construed as an offer to sell or an invitation to buy any cryptocurrencies.
Any decisions made based on the information contained in the script are your sole responsibility. Any investments made or to be made shall be with your independent analyses based on your financial situation and objectives.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.