The cryptocurrency market has faced significant headwinds since the November rally, with major altcoins struggling to sustain momentum. A sharp increase in Bitcoin dominance, coupled with external factors such as the Deepseek launch and tariff-related uncertainty linked to former U.S. President Donald Trump, has exerted additional bearish pressure.
Ethena ($ENA ) has not been immune to this downturn, undergoing a 46% correction over the past 60 days. However, technical indicators suggest that the asset may be positioning itself for a recovery.
Cup and Handle Formation: A Bullish Continuation Pattern?
On the daily chart, Ethena (ENA) appears to be forming a cup and handle pattern—an established bullish continuation pattern often signaling a potential breakout.
Following a rejection at $1.07 on December 2, ENA retraced to a critical support level at $0.47. Despite this correction, it has remained resilient above $0.52, forming the handle portion of the pattern. If this structure plays out as expected, ENA could rally toward the neckline resistance at $1.29, representing a potential 141% upside from current levels.
Key Resistance Levels and Technical Indicators
200-Day Simple Moving Average (SMA): The 200-day SMA currently serves as an intermediate resistance level. A confirmed breakout above this moving average would strengthen the case for a bullish recovery.
MACD (Moving Average Convergence Divergence): The MACD indicator suggests that bearish momentum is weakening. A potential bullish crossover could enhance buying pressure and signal a shift in market sentiment.
Will Ethena (ENA) Confirm a Breakout?
ENA stands at a crucial juncture. A decisive break above the 200-day SMA and neckline resistance at $1.29 could set the stage for a strong rally toward its all-time high of $1.52. However, broader market conditions—particularly the price action of Bitcoin and Ethereum—will play a key role in determining whether this recovery is sustainable.
Confirmation above these critical resistance levels is essential before a full-fledged rally can be validated. Investors should closely monitor price action and technical indicators to assess the strength of a potential breakout.
