The Ethena (ENA) price is still moving in the wrong direction. Price action remains heavy, sellers are in control, and momentum has not clearly shifted yet. From a distance, it looks like another weak altcoin stuck in a downtrend.
At writing, ENA is down almost 8% on the day. That drop keeps pressure on short-term bulls and reinforces the broader bearish structure. Still, beneath the surface, market positioning is starting to tell a different story.
On the lower timeframes, the ENA price continues to print lower lows. Each bounce has been sold, and the token remains below key resistance zones.Volume has increased during the selloffs, indicating there is still a respect for the downside.
However, the rate at which the decline is being sustained has begun to ease. Notice that the recent candles are not showing the same level of follow-through from pushes below, which is typical of less aggressive selling. This is where traders begin to look away from price alone and toward derivatives data.
What The Ethena Chart Is Showing
CryptoInsightUK shared on X that the ENA price is showing early signs of bullish divergence on lower timeframes. With price still drifting lower, the momentum signals are failing to confirm this movement as strongly.
However, it doesn’t necessarily imply that a reversal is imminent. It does suggest that downside momentum is weakening. In many cases, it becomes the foundation for either a relief bounce or a larger trend shift if buyers step in with conviction.
One of the more interesting signals comes from open interest. Despite the ENA price trending lower, open interest has been climbing. This tells us new positions are being added, not closed.
When open interest rises during a downtrend, it often means shorts are building exposure. That alone is not bullish, but it becomes important when combined with other factors.
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At the same time, the premium remains negative, and funding rates continue to flip back and forth. That behavior suggests traders are leaning bearish but without strong confidence. Positioning is crowded, but conviction is thin.
Why a Short Squeeze Is on the Table For Ethena
CryptoInsightUK noted that if the ENA price finds even modest strength, the current setup could fuel a short squeeze. With open interest elevated and positioning skewed to the downside, a sharp bounce could force short sellers to cover.
This does not require a major catalyst. In compressed markets, small spot buying can trigger outsized moves when leverage is involved. That said, strength still needs to show up on the chart first.
For now, the ENA price remains technically weak. The trend has not flipped, and buyers have not reclaimed key levels. Until that happens, downside risk is still present.
At the same time, market positioning suggests the trade is becoming crowded. If a stabilization of prices and the divergence of momentum does occur, a potentially volatile move by Ethena (ENA) may be underway.
Whether or not such action shall be a brief reversal or more shall become apparent by the reaction at support levels and volume activity.
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