Ethena flips crucial resistance as crypto fear and greed index rises

The Ethena token price rose for three consecutive days as sentiment in the crypto industry improved.

Ethena (ENA), known for its USDe stablecoin, rose to $0.4676, its highest level since July 24. It’s up over 130% from this year’s low.

The rise comes as the crypto fear and greed index continues to rise, moving towards the neutral point of 50 from last week’s fear zone of 38.

Bitcoin (BTC) rose to $67,000, while Ethereum (ETH) and Solana (SOL) rose to $2,650 and $160, respectively. In most cases, altcoins, Bitcoin and crypto are performing well while the fear and greed index is rising.

Ethena’s rally also coincided with the decreasing likelihood of the USDe stablecoin pegging this year. The probability of a stablecoin losing its peg has dropped from 16% a few months ago to 4%.

USDe is not pegged to the US dollar like Terra USD. Instead, it maintains its $1 peg by implementing automatic and programmatic delta-neutral hedges on support assets. Data shows that the value of USDe in circulation is over $2.4 billion.

Unlike other popular stablecoins such as Tether and USD Coin, USDe provides returns to its holders. According to its website, it has an APY of 8%, which is higher than what U.S. government bonds pay.

Ethena’s recovery comes despite data showing that the total value locked in its ecosystem continues to decline. TVL fell from a year-to-date high of $3.6 billion to $2.4 billion.

Still, developers have made several important moves in recent months. Last week, they announced plans to invest $46 million of their reserve fund in tokenized assets. Ethena also received support from BlackRock and Securitize for its new stablecoin UStb.

Ethena price reversed key resistance ENA price chart | Source: TradingView

The daily chart shows that ENA price dropped to $0.20 in September and rose to $0.462, an increase of over 125%. It has reversed the key resistance at $0.4260, the September 30 high and the neckline of the double bottom formation.

ENA also broke above the 50-day moving average, while the Money Flow Index indicator also trended upwards. Therefore, the token will likely continue to rise as the bulls target the key resistance level of $0.5150, the highest rise from July 24.