Ethereum (ETH) Panic? Not So Fast: Ethena Data Shows Demand Holding

This past weekend’s restaked Ethereum scare caused by the KelpDAO hack set off a predictable panic attack. As traders prepared for forced exits and cascading sell pressure, narratives about a possible unwind of staked ETH positions quickly emerged. However, the information from Ethena’s USDe ecosystem refutes this thesis.

Activity never disappeard

User activity should come first. With over 1,600 active USDe addresses and more than 400 new wallets created in a single day, both daily active addresses and network growth experienced a sharp spike. This does not appear to be a system in retreat. If anything, it implies that despite the commotion, onboarding and engagement continued. Participation usually decreases in panic-driven environments; in this case, it increased.

Exchange flow data also supports the thesis. During periods of uncertainty, there was a noticeable increase in inflows, suggesting that traders were either rotating their capital or taking defensive positions. However, what followed, a quick normalization, was equally significant. Balances returned to baseline levels as the spike subsided. Rather than a structural exit from the asset, such a rapid reversal suggests reactive short-term positioning.

Participating stays high

Shortly after the exploit headlines involving restaked ETH, mentions of USDe reached a three-month high. That is consistent with increased awareness, but not necessarily with a pessimistic view. Spikes in social volume in cryptocurrency frequently correspond with local disruptions rather than long-term trend changes. Instead of giving up on the trade, the market was keeping a close eye on it.

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Lastly, metrics related to whale activity and age consumed reveal spikes in large transactions and the movement of dormant capital, especially during the peak of volatility. That is consistent with profit-taking and repositioning rather than complete surrender. Large holders were still active despite not leaving in large numbers.

When combined, the picture is more complex than the initial fear implied. Indeed, there was tension. Yes, flows increased. However, participation did not decline and demand did not fall. According to Ethena’s data, staking-related interest is still present, and the market’s response was more intense than the underlying fundamentals justified.