Enjin Coin (ENJ) has been in an unstoppable bull run in 2023.
It has jumped in all but two days this year, making it one of the top-performing coins. According to CoinDesk, ENJ was trading at $0.47, which was the highest it has been since November 10 of this year. Here are several reasons why Enjin is soaring.
Short liquidations rise
The first main reason why Enjin is soaring is that short liquidations have jumped to the highest level in months. Data provided by CoinGlass shows that over $539k worth of short sales were liquidated on Thursday. This was an increase from the $257k short sales that were liquidated on Wednesday.
As shown below, these liquidations have been moving in an upward trajectory starting from the first week of the year. This trend is mostly because of the ongoing macro issues as inflation started to drop. Data published in the past two weeks has shown that inflation remains under pressure. On Thursday, numbers revealed that the producer price index (PPI) dropped in December.
Metaverse tokens soar
The other main reason why Enjin coin price has risen is simply because of the performance of NFT and metaverse tokens. As we wrote here, we have seen most well-known metaverse tokens like Decentraland’s MANA and Sandbox’s SAND rise to their highest levels in months. Historically, cryptocurrencies in similar industries tend to move in sync with each other.
Meanwhile, data compiled by CryptoSlam shows that the volume of NFT sales has started to creep back up in the past few weeks. This is notable since Enjin exists in the NFT industry. Its Efinity product makes it possible for people to mint and sell NFTs using Polkadot’s technology.
What next for Enjin Coin
ENJ/USD chart by TradingView
Enjin Coin was one of the worst-performing crypto coins in 2022 as it transitioned into a fallen angel. It finally woke up in 2023, pushing it to the highest point since November. The coin has surged above all key resistance levels and moved above the 25-day moving average. Further, the closely-watched supertrend indicator is still bullish.
However, as shown in the chart above, some longs have started to liquidate their positions as well. This is a sign that the coin could start pulling back in the next few days. If this happens, the next point to focus on will be at $0.3822.
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