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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.
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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.