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

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

Whales buy EigenLayer dip

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

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

Read more: Ethereum ETFs – Understand what they are and how they work

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

Volume of the proper layer. Source: Santiment

Cryptocurrency analyst Michaël van de Poppe believes that EIGEN’s recent decline may be short-lived. Furthermore, he suggests that this drop could set the stage for a potential rally. Thus, EIGEN could possibly rise to $5 in the near future.

“One of the most promising projects, EIGEN, is doing well. It picked up liquidity and started an uptrend, so the whole ecosystem woke up. Expecting to get 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’ net flow, which shows the difference between the amount of crypto bought and sold by large investors, revealed that it jumped by a staggering 168% in the past seven days.

EigenLayer Large Holders Netflow. Fonte: IntoTheBlock

This increase indicates that a higher level of accumulation is happening compared to distribution. Lookonchain also confirms this by revealing that two separate wallets purchased EIGEN worth over $6 million yesterday.

Price forecast

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

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

Read more: 10 DeFi Tokens to Diversify Your Portfolio

However, the price could fall if crypto whales fail to increase their holdings. Furthermore, the upcoming token unlock in October could limit upward momentum, potentially causing EIGEN to fall to $3.37, the lowest level of the 78.6% Fibonacci.

Price analysis on the EigenLayer 4-hour chart. Source: TradingView

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