Ethena [ENA] In the last 24 hour, cryptos have seen an impressive surge.
While this might seem positive on the surface it is important to note that the majority of growth has little to do the performance of the protocol. A massive rally is not yet possible.
Ethena capital remains slim
It is unlikely that the Protocol had much to do with ENA’s strong press time price, as Ethena only received a small amount of capital while the protocol incurred minimal fees. DeFiLlama revealed that Total Value Locked increased by approximately $160 millions, reaching $4.719 Billion at press time.
TVL is used to measure the value of an asset. When its value increases, this indicates a greater interest and value in that asset.
Like the depositors’ convictions, scales are often a reflection of their beliefs.
Ethena’s conviction is still a little iffy. DeFiLlama has shown that revenue from the protocol was also very minimal. Ethena The last 24 hour period generated $56.91.
The revenue generated over the last 30 day period was minimal too, at just $21,317.
How about spot market bidding?
As spot traders flip the script, there may be a growing confidence among them. CoinGlass reported that Net Inflows on the Spot Market totaled around $100,000.
It is a marked change from the two previous days when the traders had sold the asset for approximately $4.7 million between the 2-3 September.
The last 24 hours saw the Netflow turn negative, with the outflow worth $27.41 million – A sign of strong buying interest. The Netflow has dropped by $358,000. This is a sign of increased buyer interest, particularly over the past 12 hours.
Yet, when the longer-term picture is considered, it’s clear that selling pressure dominates the market.
In the two most recent weeks, Netflow for seven days was only a negative figure with $4.82 millions. It is also worth noting that there was significant sales across other periods.
Watch the direction of perps
It is important to keep an eye on the direction of the market, particularly through the lense of Open Interest-Weighted Funding Rate.
The OI Weighted Funding rate measures whether the majority of capital is long or short in the perpetual markets. The majority of positions at the time this article was written were net long with a chart reading of 0.0023%.
The concern is that the OI Weighted Funding Rate dropped between the 3rd September peak and the time of publication, from 0.0059% down to 0.0023%. The expansion of short positions was evident.
If the OI Weighted Funding rate continues to decline, it is more likely that the performance of the asset will be affected and the price could fall. The price of ENA could be significantly higher if this indicator is turned upward.
Final Summary
- ENA’s TVL and revenues grew by only a small percentage.
- The spot buying market has grown, but falling rates of funding could affect ENA.
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Source: ambcrypto.com
