The synthetic stablecoin protocol Ethena (ENA) is under mounting pressure as several key on-chain metrics show signs of weakening momentum. According to recent data, the platform is seeing a contraction in both Total Value Locked (TVL) and open interest (OI) in its futures contracts, raising concerns about liquidity, investor confidence and short-term price outlook.
Shrinking TVL Reflects Outflows & Diminished On-Chain Demand
Since a sharp drop on October 10, Ethena’s TVL has steadily declined. Data from DeFiLlama shows that the protocol’s TVL currently stands at approximately US$10.206 billion, down from about US$14.818 billion just before the decline began.
This large outflow suggests users have been exiting the ecosystem—either redeeming, withdrawing liquidity or closing positions. The effect is dual: reduced liquidity and lower fees for the protocol, which in turn may further dampen ecosystem attractiveness and amplify price risk for ENA.
Open Interest Drop Highlights Caution from Derivatives Traders
In parallel to the TVL contraction, derivatives markets are flashing caution. The open interest (OI) in ENA futures has plunged roughly 8.65 % in the last 24 hours, now resting around US$727.49 million, according to data from CoinGlass.
Lower OI indicates that traders are reducing leverage and exposure to ENA—signifying that market participants may be bracing for further downside or are unwilling to hold onto risk for now. This helps confirm that the negative sentiment is not limited to spot liquidity, but extends to futures markets too.
Technical Outlook: Support Under Threat
From a technical analysis standpoint, ENA appears vulnerable unless bullish momentum returns. The token failed to reclaim the resistance zone near US$0.5343 and has descended below the psychological US$0.50 level.
More importantly, the support trendline formed by earlier bottoms (around October 12 and October 23) near US$0.46 is being tested. If this trendline breaks, the next major pivot support (S1) near US$0.4459 could come into view. On the indicators front:
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The MACD on the 4-hour chart has crossed below the signal line — indicating that selling momentum is gaining.
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The RSI has dropped to around 53, approaching the neutral zone, which reflects weakened buying pressure.
For bulls to re-enter, a firm close above US$0.50, and ideally above US$0.5343, would be required. If that happens, potential upside pivots are near US$0.5817 (R2) and US$0.6453 (R3).
Broader Implications & Key Considerations
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The contraction in TVL and OI suggests that both “real” users (providing liquidity, using the protocol) and speculators (trading derivatives) are pulling back. This dual withdrawal can be more concerning than simply price-related declines.
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Lower liquidity can make the protocol more vulnerable to price shocks or redemption stress: fewer funds locked up mean less “cushion” for withdrawals or redemptions.
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It is worth considering external macro factors: risk-off sentiment in crypto, general deleveraging, and regulatory uncertainty might all be contributing to the cautious posture toward ENA.
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Technically, while the path of least resistance currently points downward, the scenario is not irreversible. A successful reclaim of support and a close above key resistance could flip narrative—but that would require fresh capital and improved sentiment, neither of which is guaranteed.
Conclusion
Ethena is in a precarious position. The combination of falling TVL and shrinking derivatives open interest signals that liquidity is loosening and participants are scaling back exposure. If support at ~US$0.46 gives way, the next stop could well be ~US$0.4459 or lower. Meanwhile, upside potential remains if the token manages to regain ~US$0.50 and surpass ~US$0.5343. Until then, risk remains elevated.
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