Ethena Price News: ENA Volumes Double as USDe Market Cap Reaches $12Bn – $1 Next?

Ethena (ENA) has rallied by 7% in the past 24 hours and currently sits at $0.67 as the protocol’s total value locked (TVL) keeps expanding at a rapid pace.

Following the positive momentum that the Ethereum network has been experiencing since the launch of Pectra, Ethena has seen the market value of USDe – its algorithmic stablecoin – reach a new record of $12 billion.

Ethena’s Weekly Fees and TVL – Source: DeFi Llama

USDe uses both spot assets and derivatives to create delta-neutral positions to maintain the asset’s peg to the U.S. dollar.

Since July 16, the market cap of this asset has surged from $5.5 billion to $12.6 billion at the time of writing as per data from DeFi Llama.

USDe Was Added to Coinbase’s Institutional Asset List

ENA holders receive rewards from a system called fee-switch. These rewards are funded from the revenue and fees collected from funding rates from their futures positions and minting fees for the issuance of USDe.

In addition, on August 22, Coinbase Institutional started to provide custody services for USDe, opening up a potentially big demand stream for this token as corporations and financial services providers are now able to buy this asset through the largest exchange in the United States.

Coinbase Official X Account – Source: X.com

As the market cap of USDe grows and adoption accelerates, the protocol produces higher revenues and fees and this translates into higher rewards to ENA holders. This explains the latest increase in the price of ENA.

At a time when the Federal Reserve is already preparing to cut rates, USDe offers an attractive yield-bearing investment for treasuries.

Currently, this stablecoin offers a 9% annual percentage yield (APY). A rising market cap indicates that money is flowing to USDe rapidly as the interest rate offered by traditional instruments is expected to decline.

Lower rates favor both an increase in the valuation of risky assets like ENA and also higher demand for its stablecoin. Hence, this latest decline may be considered a good opportunity to buy this DeFi token at a more attractive price compared to two or three weeks ago.

ENA Bounced Off $0.60 and Offers a 19% Upside Potential

In the past 30 days, ENA has surged by nearly 12%. Moreover, trading volumes have increased in the past 24 hours by 139% to $895 million, now accounting for a fifth of the token’s circulating supply.

ENA/USD Daily Chart (Binance) – Source: TradingView

The daily chart shows that ENA broke a long-dated trend line support and dropped to the $0.60 support.

Since touching that price zone, the token has been consolidating, possibly as buying interest at this level is strong. Trading volumes today confirm that and ENA could now be ready to retake some of the territory it lost in the past week.

The first target if ENA’s positive momentum continues would be the $0.80 area, meaning an 18.5% upside potential in the near term.

Next up, the token could eye the $1 level after this latest wave of bearish momentum fades. Market conditions continue to favor a bullish outlook for cryptocurrencies as a whole.