Ethena's deployed capital has plummeted to a multi-year low, now at just 71% of its 2025 low, highlighting a significant weakness in net long demand within the cryptocurrency market. The balance between directional long and short positions is nearly equal, a rare occurrence in crypto derivatives history that is typically unsustainable. Perpetual contracts, central to leveraged trading, maintain a relatively stable open interest, yet funding rates have remained negative for an extended period, indicating increased demand for hedging and shorting. Since February 8, Ethena's basis trading has contracted by over 60%, dropping from over $2 billion to under $800 million. This decline is attributed to the unwinding of profitable but unsustainable basis positions and the pressure from directional shorts and hedging activities.