EigenLayer (EIGEN) Volume Drops 40%, Whales Step In to Defend $3 Level

After a recent attempt to climb, EigenLayer (EIGEN) saw its price drop by nearly 10% in the past 24 hours, making it difficult for the token to reach $5.

However, crypto whales have stepped in with significant buying activity to prevent further declines. As the situation unfolds, investors are closely watching to see if this intervention can spark a recovery for EIGEN.

Whales Buy the EigenLayer Dip

EigenLayer, the leading Ethereum-based restaking project, launched its native token just over a week ago. Despite an initial price crash, EIGEN surged from $3.13 to $4.15 between October 6 and 10, fueling speculation of further gains.

However, the token has dropped to $3.62 in the last 24 hours, along with a 40% decline in trading volume.

From a trading perspective, increasing volume alongside rising prices typically signals strength and potential growth. But since both price and volume have decreased, this suggests the downtrend may be weakening, indicating a possible recovery for EIGEN soon.

Read more: Ethereum Restaking: What Is it and How Does it Work?

Crypto analyst Michaël van de Poppe believes EIGEN’s recent decline could be short-lived. He suggests that this dip might set the stage for a potential rally, with EIGEN possibly climbing toward $5 in the near future.

“One of the most promising projects, EIGEN, is doing well. It took the liquidity and started an uptrend, so the whole ecosystem woke up. Expecting to take liquidity at $4.25, have a slight dip (entry point), and then rally to $5+,” the analyst wrote on X. 

In line with this sentiment, on-chain data shows that crypto whales have continued to buy the token. A look at the large holders’ netflow, which shows the difference between the amount of cryptos bought and sold by large investors, revealed that it jumped by a whopping 168% in the last seven days.

This increase indicates that a higher level of accumulation is going on compared to distribution. Lookonchain also confirms this by revealing that two separate wallets bought EIGEN valued at over $6 million just yesterday. 

EIGEN Price Prediction: Support Remains Strong

EIGEN’s current price of $3.62 is close to the 38.2% Fibonacci retracement level, a key technical indicator for identifying support and resistance. The 38.2% level, located at $3.58, serves as a major support floor, suggesting a potential price rebound.

If EIGEN bounces off this level, it could rise toward the 78.6% Fibonacci retracement at $4.14.

Read more: 10 Best Altcoin Exchanges In 2024

However, the price may fall if crypto whales don’t increase their holdings. Additionally, the upcoming token unlock in October could limit upward momentum, potentially causing EIGEN to drop to $3.37, the lower 78.6% Fib level.