Will EIGEN price soar to $5 as ‘7 Siblings’ buys the dip?

EigenLayer’s token dropped for four consecutive days even as “7 Siblings” bought the dip, hoping for its eventual rebound.

EigenLayer (EIGEN) token tumbled to $2.3, its lowest level since Nov. 3, and down by 33% from its highest point this week and 52% below its all-time high.

Data from Nansen shows that “7 siblings” bought 1.07 million EIGEN tokens valued at $2.59 million, which is a sign that they expect it to eventually bounce back. 

This acquisition is notable because they are some of the biggest crypto investors, with over $106 million in their wallets. Their biggest holdings are staked Ethereum (ETH) tokens, Compound (COMP), and USD Coin. 

EIGEN token also retreated even after Infura announced that it was launching a decentralized public infrastructure network on EigenLayer. This will be a big event since Infura is one of the biggest infrastructure network in the crypto industry, processing over 700 billion RPC requests a year. This launch comes after RedStone launched its testnet on Eigen’s AVS network.

EigenLayer has become a leading player in Decentralized Finance, where it provides restaking solutions. It has over $12.89 billion in assets, making it the third-biggest network in DeFi after Lido and AAVE. 

EigenLayer launched its airdrop in September and has achieved a market capitalization of $435 million. Its fully diluted valuation has dropped from over $6 billion to $3.9 billion. A key challenge is that 14.9% of its market cap will be unlocked in December, diluting existing holders.

Will EIGEN price retest $5?

EigenLayer chart | Source: crypto.news

The daily chart shows that the EigenLayer price has been in a steep downward trend, falling in the past four consecutive days. The current phase of the downtrend started when EigenLayer token formed a shooting star on Nov. 10. This is one of the most popular bearish reversal signs in technical analysis.

EIGEN was trading at $2.315 on Friday, a notable level as it was its lowest level on November 3. It has also dropped below the 15-period moving average.

On the positive side, it has formed a double-bottom pattern, which is a popular bullish reversal sign. If it works out, it means that the coin will rebound and possibly retest the resistance level at $5, which is 115% above the current level.

A drop below the support at $2.31 will invalidate the bullish view and continue its downward trend, potentially to $1.5.