What Does Ethena's Trend Reveal About the Cryptocurrency Market (Author: Kyle Soska Compilation: Block unicorn) Ethena's deployed capital has fallen to multi-year lows, only 71% of the 2025 lows, reflecting extremely weak net bullish demand in the crypto market. The directional long and short positions are nearly balanced, a rare equilibrium that is difficult to sustain in the history of crypto derivatives.

Perpetual contracts, as a leverage trading hub, have relatively stable open interest, but the funding rate has been consistently negative, indicating increased demand for hedging and shorting. Ethena basis trading has shrunk by over 60% since February 8, dropping from over $2 billion to less than $800 million, mainly due to profit-taking but unsustainable basis positions gradually closing, as well as the squeezing of space by directional shorts and hedging activities. Read more: