Shorting the Ethena (ENA) token at around 68 cents right now is like making a risky wager against a bank that only holds about 9% in reserves while chaos swirls all around. The situation with ENA is complicated but very interesting because of how its ecosystem works and the intense activity happening among large holders and traders. This combination of factors creates a volatile but surprisingly resilient market that makes betting against ENA quite dangerous.

First off, ENA has shown strong resistance to downward pressure recently. Even though there is a big influx of new tokens coming into circulation—over $100 million worth thanks to an ongoing token unlock—the price of ENA has actually gone up sharply. This unusual price movement is thanks largely to whales, or very big holders, who have been accumulating billions of ENA tokens. Their buying keeps selling pressure low and builds a strong base for the price to rally from.

The real twist is the heavy use of looping strategies involving Ethena’s stablecoin called USDe. Traders borrow stablecoins and then convert them back again, repeating this cycle multiple times to increase their potential earnings. While this can boost returns, it also piles on risk. Experts from Chaos Labs have warned that if this complex loop unwinds suddenly, especially during moments when lending platforms like Aave face liquidity problems, it could trigger a serious crunch. This would make it harder for people to borrow, push borrowing costs way up, and cause huge forced selling, not just for ENA but across related decentralized finance markets.

Meanwhile, those who bet against ENA with short positions are getting hit hard. One whale, for example, opened a five-times-leveraged short position at about 52 cents only to see ENA’s price jump above 73 cents, causing millions in unrealized losses. This situation makes shorting ENA feel like trying to topple a shaky bank that everyone else is busy propping up, all while chaotic market forces keep the system from collapsing.

Betting against ENA near current prices is extremely risky because of strong whale buying, the offsetting effects of token unlocks, and complicated financial loops that add hidden risks to the market. The warnings from Chaos Labs show the balancing act could break down under stress. For now, ENA’s price movement makes shorting it like playing a dangerous game that few can win.