EIGEN has experienced a decline of 25% over the past two weeks, reaching an all-time low of $2.66. At press time, the token is trading at $2.81, but has bounced back by over 5.05% from the recent bottom.
Despite this minor recovery, EIGEN remains under pressure. However, there is a glimpse of hope as trading volume surged significantly, reflecting whale activity and a potential shift in the market.
Eigen Layer Volume Shows Slowed Activity
The downward trend has not been stopped even by recent developments. RedStone’s launch of its test net for data validation on Eigen Layer, and modular integration into decentralized applications has had little impact on Eigen Layer.
Despite these efforts, trading volume has consistently remained below $200 million, with the past three days registering below $150 million.
Whale Activity: A Strategic Accumulation or Warning Sign?
Recently, a whale acquired $23.52 million worth of EIGEN, coinciding with the price drop. This purchase, equating to 8.15 million tokens, suggests strategic accumulation as the price dipped 16%.
Furthermore, the resignation of the Chief Strategy Officer of Eigen Labs before the token generation event (TGE) fueled the 16% drop. It raised concerns about potential over-the-counter (OTC) sales and market instability.
Open4profit questions whether this is a strategic opportunity or a risk, given the executive’s departure. He describes the situation as high-risk but with the potential for high rewards if the market recovers.
Long/Short Ratio Shows Cautious Sentiment
Today, the EIGEN Long/Short ratio is over 0.95. The upshot of this ratio is that short positions are slightly more prevalent than long ones, but not to an important extent. If a ratio comes in at less than 1.0, that means that there are more shorts than longs, and it’s bearish.
The ratio here is close to 1.0, and so it means that this market is in a relatively balanced situation wherein the number of those with a bullish sentiment and the number of those with a bearish sentiment are nearly even.
It seems traders are hesitant as they wait for clearer market signals before placing strong bets on either course.
Technical Analysis: Eigen Eyes $3
The Bollinger Bands show that the price is bouncing off the lower band, hinting at possible upward momentum. The bands are narrowing, indicating reduced volatility and a likelihood of an upward breakout.
Moreover, we see a triple bottom pattern develop around the $2.70 support level, setting the foundation for a bullish reversal.
If the price can reclaim the $3 resistance level and close above the 50 and 100 EMAs, the path for a continued rally will be open. Moreover, $10 could be the next major target.
The RSI, currently around 43.49, bounced back from the oversold levels, signaling bullish momentum. Also, the MACD indicator supports this outlook; as the MACD line crosses above the signal line, this indicates a bullish crossover. The green histogram bars are expanding, signaling increasing buying pressure.
