Ethena Price Drops Amid Macro Forces and Derivatives Deleveraging

Ethena (ENA) has experienced a significant price drop due to a combination of macroeconomic factors and derivatives deleveraging.

The crypto market as a whole is experiencing a selloff, with Bitcoin falling to around $68,000 and other major cryptocurrencies dropping by 2-5%. This is attributed to renewed escalation in the US-Israel-Iran conflict and threats around the Strait of Hormuz.

President Donald Trump issued a 48-hour ultimatum to Iran, raising uncertainty about inflation, interest rates, and global growth. As a result, risk assets, including equities and cryptocurrencies, are being sold off.

Ethena's price drop is not unique to the protocol itself, but rather a reflection of the broader market trends. The altcoin is trading in a market where investors are de-risking across the board due to war and macro concerns.

Derivatives liquidations also played a significant role in Ethena's decline. A total of $245-260 million in crypto derivatives positions were liquidated, with around 75-80% from longs. Bitcoin and Ethereum accounted for nearly 90% of these liquidations, but altcoins like ENA also suffered declines.

Ethena's existing downtrend and technical weakness also magnified the move. The protocol is currently trading below its key moving averages and VWAP, with a RSI near oversold levels. This setup is consistent with a continuation-trend behavior.