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The governance token for synthetic dollar protocol Ethena (ENA) has experienced a 33% loss over the past week, dropping to $0.9632. Despite this significant decline, ENA appears to be on track for a quick recovery, having grown by approximately 10% in the last 24 hours. This volatility sets it apart from more established cryptocurrencies like Bitcoin and Ethereum, which saw declines of 9% and 12% respectively, before recovering by 5% and 4% in the last 24 hours. Ethena’s ecosystem revolves around the USDe stablecoin, which remains pegged to the US dollar using a delta-hedging strategy based on Bitcoin and Ethereum reserves.

USDe is widely used for staking, with $2.4 billion in total value locked and nearly 160,000 users on the platform. The current annual yield is around 11.2%, a sharp decline from the previous day’s 17.2%. A report by CryptoQuant highlighted the importance of Ethena’s keep rate remaining above 32% in a bear market to mitigate risks for USDe holders. ENA began trading at 79 cents on April 2 and has demonstrated relative stability, with support at a dollar. Although it reached a peak of $1.52 on April 11, the current price reflects a 37% retracement. With an RSI of 66 and rising, investors are showing interest in buying ENA, indicating optimism in the token.

Despite the innovative nature of Ethena’s protocol and its rapid growth, concerns remain about stablecoins like USDe that are not backed by cash or cash equivalents. The history of Terraform Labs’s UST, which lost its peg to the dollar due to a burn/mint mechanism involving an unbacked token called LUNA, serves as a cautionary tale. UST’s decline led to instability in the market, resulting in widespread bankruptcies across the industry. The uncertainties surrounding ENA and USDe continue to linger, with investors wary of potential risks associated with unbacked stablecoins.

As the crypto market braces for Bitcoin’s quadrennial halving event on Saturday, meme coins like Slothana (SLOTH) are expected to see significant rallies. With an ICO that raised over $10 million, Slothana is positioned as the next viral token on Solana, following the success of previous meme coins like Slerf and DogWifHat. The countdown timer on Slothana’s website suggests the presale will close on April 29, hinting at a potential exchange listing in the near future. As the industry awaits the outcome of Bitcoin’s halving event on April 20, optimism and anticipation surround meme coins like Slothana, providing a light-hearted and entertaining aspect to the crypto market amidst ongoing uncertainties. Investors are advised to exercise caution when trading in high-risk assets like crypto and to conduct thorough research before making investment decisions.

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