Ethena's Fundamentals Point to Buy, But Negative Funding Rate Raises Red Flags

Ethena (ENA) has posted its strongest monthly earnings in eight months despite negative funding rates threatening to derail a predicted 30% rebound. The synthetic dollar protocol generated $605,000 in protocol earnings during the first 17 days of May, marking an eight-month high.

Total value locked has increased by about $998 million since April 23, indicating fresh capital entering the protocol as investors deepen their exposure to ENA and its broader ecosystem. Rising TVL typically signals user confidence and growing demand for a protocol's core products.

Data shows spot exchanges have recorded cumulative netflow outflows of about $140 million over the past ten days, often tied to bullish accumulation. Investors have kept buying through ENA's price swings, despite the negative funding rate that confirms bears now hold the upper hand on derivatives venues.