The native token of Eigenlayer, EIGEN, has been under significant pressure recently due to bearish market conditions and increased whale activity. With a drastic drop in price and negative on-chain indicators, many are questioning whether EIGEN can recover or if it’s set for a further decline.

Whale Activity Raises Concern

One of the key developments contributing to EIGEN’s struggles is the recent deposit of 2 million tokens (worth $3.18 million) by a whale into Binance. This deposit is particularly concerning because the same whale had previously withdrawn the same amount of tokens for $9.07 million just two months ago. Given that EIGEN’s price has plummeted from $4.53 to $1.59, the whale is now facing a significant loss of nearly $5.89 million.

At the time of writing, EIGEN was trading at $1.61, marking a sharp 9.77% decline in the last 24 hours alone. This price action follows a steady downtrend from its peak of $5.659, with the token now struggling to maintain support at crucial levels.

Price Action and Key Resistance Levels

EIGEN’s price has been on a downward spiral, unable to break past key resistance levels. At $2.20, $3.03, and $3.47, the token faces significant resistance, making it difficult to regain upward momentum. On the other hand, the support level at $1.60 is also weakening, leaving the token vulnerable to further price drops.

With the current market trends, EIGEN could see brief consolidation at the $1.60 range, but unless a shift in market sentiment occurs soon, it risks slipping further to the $1.42 level. This continued downtrend would confirm bearish market conditions for EIGEN, raising doubts about the token’s ability to recover in the near future.

Bearish On-Chain Indicators

On-chain data paints a largely bearish picture for EIGEN. The network growth has been minimal, standing at just 0.74%, which reflects limited adoption and interest from investors. Additionally, the concentration of assets and large transactions are both trending negatively, suggesting that large investors are becoming less engaged with the token.

The token’s position “in the money” shows slightly neutral sentiment at -0.04%, highlighting the uncertainty surrounding EIGEN’s price direction. These indicators point to a lack of investor confidence, making it harder for the token to attract new buying interest.

Liquidation Heatmap and Support Levels

The liquidation heatmap for EIGEN reveals that the $1.60 price level is a critical point for the token. If EIGEN’s price remains at or falls below this level, it could trigger additional liquidations, adding downward pressure to the token’s value. However, there are potential support zones at $1.55 and $1.60, where buying activity could step in and help stabilize the price.

Given the large amount of leverage at these levels, it’s possible that a rebound could occur if enough buying interest returns. But this will depend on how quickly market sentiment improves and if there is renewed investor confidence in EIGEN.

Outlook for EIGEN: Recovery or Further Decline?

The recent whale activity, combined with the token’s continued price decline and negative on-chain signals, suggests that EIGEN could continue to face downward pressure in the short term. The $1.60 support level may provide some temporary relief, but without a shift in market sentiment or significant positive developments, the token’s ability to recover remains uncertain.

Investors should closely monitor key price levels and on-chain developments to determine whether EIGEN can stabilize or if the bearish trend will persist. Until a clear sign of a recovery emerges, EIGEN’s future remains highly volatile, with the potential for further price drops unless market conditions change.