Ethena (ENA) is once again in the spotlight—though not for bullish reasons. The synthetic dollar protocol, which made waves in Q1 2025 with its rapid adoption and innovative yield mechanisms, is now facing mounting pressure as a $58 million token unlock looms.
According to official data from Ethena Labs, the unlock is scheduled for May 6, releasing over 200 million ENA tokens into circulation. This represents roughly 9% of the total supply, and markets are bracing for heightened volatility.
ENA currently trades at $0.278, down nearly 80% from its $1.40 high in January. And with investor sentiment already fragile, the timing couldn’t be worse.
Understanding the Tokenomics: Why It Matters
Token unlocks aren’t inherently bearish—but when timed during a downtrend and in large volume, they often accelerate short-term selling. In Ethena’s case, the unlock includes allocations to early backers, contributors, and team members—wallets more likely to realize profits or rebalance.
Breakdown of the May 6 Unlock:
- $58M USD worth of ENA entering the market
- Community & contributor share involved
- 3rd major unlock since March TGE
- Circulating supply to jump ~9%
According to FXStreet, on-chain tracking suggests that some early recipients have already moved funds to exchanges in anticipation.
From Hero to Hard Reset: ENA’s Price Collapse
Ethena’s trajectory since launch has been brutal. After peaking above $1.40, ENA has steadily declined, underperforming most large-cap tokens. While the protocol still boasts over $2B in sUSDe circulation, confidence in the token’s appreciation potential has dwindled.
Source: Tradingview
Chart Recap:
- All-time high (Jan): $1.40
- Current price (May 5): $0.278
- Weekly loss: –11%
- Market cap rank: 79th
What’s more concerning is the lack of clear technical support below $0.25, meaning a breach could trigger a new wave of liquidation-driven selling.
What Comes Next for Ethena?
Despite price pressure, Ethena’s fundamentals remain strong in many respects:
- The protocol’s TVL still exceeds $2.5B
- Integration with Bybit, Binance, and Pendle supports real yield adoption
- The earnings model behind sUSDe continues to generate high APY
- Developer activity on GitHub has remained stable post-launch
Yet, the token’s utility and governance value haven’t convinced long-term holders, and many are questioning whether ENA can break the dilution cycle without new catalysts.
Some analysts believe that this token unlock could represent a local bottom, as “weak hands” exit and future unlocks taper off in size. Others warn that if ENA dips below $0.25, sub-$0.20 targets could come into play.
Final Thoughts: Inflection Point or Investor Exodus?
Ethena’s upcoming token unlock may define the narrative for ENA over the next quarter. If buyers step in and absorb the additional supply, it could restore some confidence in the asset. But if the unlock triggers a fresh wave of capitulation, ENA risks losing its early 2025 momentum entirely.For now, all eyes are on May 6—and whether Ethena can prove that it’s more than just a farm-and-dump DeFi trend.
