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

EigenLayer’s token has fallen for four consecutive days, despite “7 Brothers” buying the dip in hopes of an eventual recovery.

The EigenLayer (EIGEN) token has fallen to $2.3, its lowest level since November 3, remaining 33% below this week’s high and 52% below its all-time high.

Data from Nansen shows that “7 brothers” purchased 1.07 million EIGEN tokens worth $2.59 million, a sign that they expect to eventually recover.

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

The EIGEN token was withdrawn even after Infura announced the launch of a decentralized public infrastructure network on EigenLayer. This will be a big deal as Infura is one of the largest infrastructure networks in the crypto industry and processes over 700 billion RPC requests annually. This launch comes after RedStone launched its testnet on Eigen’s AVS network.

EigenLayer has become a leading player in the Decentralized Finance space, where it offers resharing solutions. It has over $12.89 billion in assets, making it the third largest network in DeFi after Lido and AAVE.

EigenLayer launched its airdrop in September and reached a market cap of $435 million. Its fully diluted valuation fell from $6 billion to $3.9 billion. A key challenge is that 14.9% of the market cap was released in December, diluting existing holders.

Will EIGEN price retest $5? EigenLayer chart | Source: crypto.news

The daily chart shows that the EigenLayer price is in a steep downtrend, falling for the last four days in a row. The current phase of the downtrend started when the EigenLayer token formed a shooting star on November 10. This is one of the most popular downtrend signals in technical analysis.

EIGEN was trading at $2.315 on Friday; This is a remarkable level as it is the lowest level on November 3. It also fell below the 15-period moving average.

On the positive side, it formed a double bottom pattern, which is a popular bullish reversal sign. If it works, this means the coin will recover and likely retest the $5 resistance level, which is 115% above the current level.

A decline below the $2.31 support will invalidate the bullish view and potentially resume the bearish trend towards $1.5.