- Crypto analyst Vinicius Barbosa highlights surprising negative funding rates for Ethena on May 18th.
- Barbosa notes that Ethena is heavily short-sold in the derivatives market, indicating a potential short squeeze.
- “The market’s open interest is leaning heavily towards short positions against ENA, which could soon lead to a price surge,” Barbosa explains.
This detailed analysis of Ethena (ENA) explores the potential for a significant short squeeze in the cryptocurrency market, driven by negative funding rates and heavy short-selling.
Potential for a Short Squeeze in Ethena (ENA)
As the crypto market struggles to gain momentum, Ethena stands out with its significant negative funding rates, suggesting a buildup of short positions. According to CoinGlass, ENA short sellers are currently paying long position traders an annualized rate of 268%, a clear indicator of the market’s bearish sentiment towards ENA.
Short Squeeze Price Targets for ENA
At the time of writing, ENA is trading at $0.75, with a 12.5% increase in open interest and a 35.48% increase in volume, reaching $541.55 million. Notably, $283.67 million worth of short positions have been opened, dominating 50.54% of the market activity. Key price targets in a short squeeze scenario are between $0.83 and $0.89, where most liquidations occur, and a critical level at $1.08, potentially offering gains from 11% to 44% from the current price.
Support from Key Players Boosts Ethena’s Popularity
Ethena, built on Ethereum and governed by the ENA token, has garnered support from significant figures like former Bitmex CEO Arthur Hayes. This endorsement has rapidly increased its popularity, drawing comparisons to Terra’s (LUNA) rise and fall in 2022. However, the current short interest might indicate a bearish outlook on Ethena’s fundamentals rather than mere speculative interest, suggesting that a short squeeze, despite all signals, might be hindered.
Conclusion
This analysis of Ethena (ENA) outlines the potential for a short squeeze driven by negative funding rates and substantial market interest in short positions. Investors interested in ENA should understand the risks and make informed decisions moving forward. The views and predictions in this article belong to the analyst and are not investment advice.
