Ethena – Why ENA’s USDe depeg mirrors Terra UST fears

Key Takeaways

What triggered the recent pressure on Ethena’s ENA token? 

The depegging of Ethena’s stablecoin USDe to $0.65 amid a market-wide altcoin crash sparked bearish sentiment and investor withdrawals.

What price levels are critical for ENA’s next move? 

ENA must reclaim the $0.31–$0.38 support zone to target $0.85, or risk falling toward $0.265 if selling continues.

The crypto market witnessed one of its largest drawdowns in recent months, severely impacting altcoins. After staying above the $4 trillion threshold, market capitalization fell to $3.75 trillion at press time.

Altcoin-collateralized stablecoins such as USDe were not spared from the decline, and by extension, Ethena [ENA]also felt the pressure.

Stablecoin depeg shakes ENA

Ethena’s yield-bearing stablecoin, USDe, experienced a depegging event following the sharp decline in altcoin prices across the market.

Stablecoins are designed to maintain a 1:1 peg with the U.S. dollar, which typically requires various strategies, including fiat reserves or altcoin collateralization—the case with ENA.

The depeg saw 1 USDe trade at $0.65 instead of the expected 1:1 redeemable ratio.

Source: TradingView

The event sparked debate across the crypto community, with some comparing it to Terra Luna’s UST collapse in 2022, which lost its dollar peg and triggered a major market downturn.

Notably, USDe later regained its 1:1 ratio. Ethena’s official account acknowledged the depeg but assured users that the stablecoin remains secure, stating:

“USDe will therefore be more overcollateralised than yesterday as a result of these events.”

The statement confirmed that holders had little to worry about in terms of asset safety.

Investors split over ENA

The market remains divided over Ethena’s native token, ENA, as different investor groups take opposing positions.

In the spot market, investors continue to accumulate ENA, purchasing about $4.59 million worth of the token on the 11th of October.

However, this marks the lowest daily accumulation in three days, compared to the $25.75 million purchased earlier in the week.

Source: CoinGlass

Interestingly, the bullish sentiment seen in spot markets contrasts with on-chain data. Ethena’s total value locked (TVL) saw a massive $1.25 billion outflow in the past day alone.

Investors appear to be withdrawing funds from ENA for the long term and possibly offloading positions on derivatives exchanges—likely to cut losses or as part of a broader bearish shift following USDe’s unstable performance.

Market outlook

The broader outlook shows the market currently moving against ENA, as the token trades below a critical support zone between $0.31 and $0.38.

This zone remains a key level ENA must reclaim for any potential recovery. Failure to break above it could push the token lower.

If ENA regains this level, it could rally toward the $0.85 region. However, a continued decline could see the asset fall toward $0.265—the next major support zone on the chart.

Source: TradingView