Decoding Enso’s $11mln liquidation: Is 180% weekly surge sustainable?

Enso [ENSO] witnessed $11.67 million worth of positions liquidated in the futures market over the past 24 hours. CoinGlass data showed that 70.7% of these were short liquidations, revealing a massive short squeeze.

Source: CoinGlass

The liquidations were 4.82 times the 7-day average and were 1.30x the recent peak, noting extremes in the liquidation data.

The token has rallied 38.3% in the past 24 hours and 180% over the past week. Its daily trading volume was up 170%, according to CoinMarketCap data.

Source: Coinalyze

The massive increase in Open Interest in recent days continued over the weekend, with the past 24 hours seeing a 70% increase. During the past two days, the spot CVD was moving sideways, a sign that the move was predominantly derivatives-driven.

Is Enso overextended?

Source: ENSO/USDT on TradingView

In a post on X, cryptotrader Sardauna warned that traders should not buy Enso now since the market was overextended. The expected upward move might have concluded, or was nearly over, was the inference.

The daily session was a fair distance from the $1.992 and $2.785 highs from late October. The previous daily session’s close above the $0.844 and $1.178 swing points from the downtrend suggested a trend shift for ENSO.

Hence, though $2 was not breached during the current attempt, the overall bias for this timeframe should be bullish.

Gauging the Enso pullback

Source: ENSO/USDT on TradingView

The $1.992 level was not defended for long and was retested as resistance in recent hours. Despite that, the 1-hour timeframe continued to have a bullish structure.

To shift this bearishly, a move below $1.63 would need to commence.

Further south, the $1.3, $1.06, and $0.72 levels were the nearby support levels.

Traders’ call to action- Take profits

Those traders already in profit should look to realize them.

Traders waiting to buy might have to wait for a deeper retracement toward $1. Even then, there is the threat that the move might not be sustainable to warrant a long-term trend shift, especially if Bitcoin [BTC] continues its bearish momentum.

Final Thoughts

• The Enso momentum in recent days was remarkable, and the short liquidations the move forced were extreme.
• In the short-term, a price dip below $1.63 would indicate a deeper pullback toward $1 was brewing.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.