EigenLayer (EIGEN) Whales Deploy $165M to Buy the Dip After All-Time Low

Key Takeaways

• EIGEN’s price hit a new low seven days ago after it crashed from December highs.
• However, whales have accumulated millions of the altcoin within the last 24 hours.
• The MVRV ratio shows that EIGEN is undervalued as it forms a bullish divergence

On Feb. 3, EigenLayer’s (EIGEN) price hit an all-time low of $1.52 after falling 45% in the last month.

However, one week after hitting this low point, crypto whales accumulate the token in droves. This aggressive accumulation suggests that a potential rebound could be close.

But with market sentiment still fragile, is this still a sign that EIGEN has hit the bottom?

EIGEN Whale Accumulation Sparks Hope for Rebound

Two months ago, EIGEN’s price rallied to a new all-time high of $5.65. At that time, the token saw increased demand by both retail and whales, which fueled the milestone.

The recent price crash coincided with intensified selling pressure from whales. On Jan. 30, addresses holding between 10 million and 100 million EIGEN tokens collectively had over 250 million tokens.

By the time EIGEN hit its all-time low, their holdings had plunged below $160 million. However, between yesterday and the time of writing, the balance of these addresses has moved from $164 million to over 260 million, indicating that whales have bought the EIGEN dip.

At the altcoin’s current price, this purchase amounts to approximately $165 million. If this buying pressure continues, EIGEN’s price will likely trade higher in the short term.

Bottom Hit?

Moreover, the 30-day Market Value to Realized Value (MVRV) ratio supports the thesis that EIGEN’s price could rebound. This metric shows whether the price is above or below its fair value while providing insights into overall market profitability.

A higher MVRV ratio indicates greater unrealized profits, increasing the likelihood of an asset being overvalued. On the other hand, when the ratio declines, it signifies shrinking gains and potential undervaluation.

Historically, EIGEN reaches an overvalued point when the ratio is between 14% and 45%. It hits the undervalued region when the metric is between -13% and -25%.

As seen below, the token’s 30-day MVRV ratio is -35%, indicating it might have hit the bottom. Thus, if buying pressure increases among these EigenLayer whales, the altcoin’s price rebound might be validated.

EIGEN Price Forms Bullish Divergence

On the daily chart, EIGEN’s price trades within a descending channel after undergoing two months of intense selling pressure.

However, the same chart shows that the token seems to have found support at $1.67. Amid this, the Relative Strength Index (RSI) seems to recover after hitting the oversold region below 30.00.

As this setup takes shape, the Chaikin Money Flow (CMF) reading rises, forming a bullish divergence against the price. The rising CMF validated the whale buying pressure initially mentioned.

If the indicator’s rating breaks above the zero signal line, then EIGEN’s rebound might be validated. In that scenario, the cryptocurrency’s value might rise to $3.05 at the 0.618 Fibonacci level.

Alternatively, if whales decide to distribute the tokens again, this prediction might not come to pass. Instead, the cryptocurrency’s value might decline to another all-time low.