A recent multimillion-dollar deposit of Eigenlayer [EIGEN], worth $3.18 million, on Binance has caught the attention of the cryptocurrency community.
The whale had previously withdrawn the same amount of EIGEN for $9.07 million just sixty days ago, but with the current significant drop in price, this investor is now facing a massive loss of $5.89 million.
The value of the alternative coin has plunged from $4.53 to $1.59, prompting speculation on whether this is a cautionary signal or a potential precursor to a recovery.
Factors Driving the Current EIGEN Price Movements
As of the latest update, EIGEN was trading at $1.61, indicating a notable 9.77% decline in the past 24 hours. The cryptocurrency has experienced a continual decrease from its peak of $5.659, and it is presently below key resistance thresholds.
The crucial resistance levels stood at $2.20, $3.03, and $3.47, implying areas where the price could encounter obstacles in climbing. The support levels appeared vulnerable, with the $1.60 mark potentially offering additional reinforcement if the price does not dip further.
Considering the current market trajectory, a brief consolidation in the $1.60 range might be anticipated. Nevertheless, without a change in market conditions, the chance of a further descent towards the $1.42 level remains looming.
Analyzing On-Chain Activity and Market Sentiment
The current on-chain metrics for EIGEN indicated a bearish scenario. The net network expansion sat at 0.74%, signifying limited growth prospects.
Furthermore, both asset concentration and substantial transactions demonstrated negative trends, with -0.08% and -2.22%, respectively. These signals hinted at diminishing interest in EIGEN, potentially amplifying the existing downturn.
In addition, the token’s “in the money” status displayed a slightly neutral sentiment at -0.04%, emphasizing the prevalent uncertainty within the market.
Predicting Future Price Trends
An assessment of the liquidation heatmap for EIGEN pointed out a crucial juncture around the $1.60 price level, where significant leverage was evident.
If the price remains stable or descends to this range, further liquidations could instigate downward pressure. The heatmap also identified support regions near $1.55 and $1.60, potentially attracting buying activity.
The substantial liquidation leverage at this threshold might eventually prompt a rebound if there is an upsurge in purchasing interest.
Will Eigenlayer Witness a Revival or Persist in Decline?
The substantial loss incurred by the whale, alongside the bearish price movements and on-chain indicators, implies that EIGEN could continue to confront downward trends.
Nonetheless, the $1.60 support level might offer temporary stability, presenting a potential opportunity for recovery in the short run.