Token

bullish

EigenLayer

DeFi

<p class="is-style-lead">EigenLayer’s token continued its strong recovery as investors bought the dip following last week’s airdrop.</p> 
<h2 class="wp-block-heading" id="eigen-unlocks-and-tvl-retreat">EIGEN unlocks and TVL retreat</h2> 
<p>The EigenLayer (<a href="https://crypto.news/price/eigenlayer/" target="_blank">EIGEN</a>) token rebounded, reaching a high of $3.86, its highest level since Oct. 2, and 26% above its all-time low.</p> 
<p>EIGEN’s rebound occurred after the founder announced that the network was shifting focus to Web3 applications post-airdrop. This is important since EigenLayer does not have a consumer-facing application. Instead, it secures several actively validated services like AltLayer, Ethos, and Lagrange.</p> 
<p>The rebound also came after a hacker stole 1,673,645 tokens valued at over $6.8 million. The hacker moved these tokens through a decentralized swap platform and then transferred the stablecoins to centralized exchanges.</p> 
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   <p lang="en" dir="ltr">Community Update:<br><br>In an isolated incident this morning, an email thread involving one investor’s transfer of tokens into custody was compromised by a malicious attacker.<br><br>As a result, 1,673,645 EIGEN tokens were erroneously transferred to the attacker’s address. The attacker…</p>— EigenLayer (@eigenlayer) <a href="https://twitter.com/eigenlayer/status/1842317191045157099?ref_src=twsrc%5Etfw" target="_blank" rel="nofollow">October 4, 2024</a>
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<p>EIGEN token holders face two significant risks ahead. First, there is a dilution risk since EigenLayer has 187 million tokens in circulation against a maximum cap of over 1.6 billion tokens.</p> 
<p>According <a href="https://x.com/eigenlayer/status/1836111446092263453" target="_blank" rel="nofollow">to the developers</a>, the network will unlock and distribute 67 million tokens, or 4% of the initial supply, in the first year. These unlocks will happen every Tuesday over the next 12 months, with 3% going to Ethereum and liquid staking token stakers. 1% of the tokens will go to EIGEN stakers and operators.</p> 
<p>Token unlocks are typically bearish because they increase the number of tokens in circulation, diluting existing holders.</p> 
<p>The second risk is that demand for restaking is waning. According to <a href="https://defillama.com/protocol/eigenlayer?denomination=ETH" target="_blank" rel="nofollow">DeFi Llama</a>, EigenLayer’s total value locked has dropped to $10.7 billion, down from over $20 billion earlier this year. In Ethereum terms, the network secures 4.43 million Ethereum, down from the year-to-date high of 5.34 million.</p> 
<p>A likely reason for this is that Ethereum (<a href="https://crypto.news/price/ethereum/" target="_blank">ETH</a>) staking market cap has fallen in the past few weeks. It has retreated by almost 8% in the last 24 hours to $83 billion, according to <a href="https://www.stakingrewards.com/assets/proof-of-stake" target="_blank" rel="nofollow">StakingRewards</a>.</p> 
<h2 class="wp-block-heading" id="eigen-forms-an-inverse-hs-pattern">EIGEN forms an inverse H&amp;S pattern</h2> 
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 <img decoding="async" width="3574" height="1982" src="https://crypto.news/app/uploads/2024/10/EIGEN-Price.png" alt="EIGEN price" class="wp-image-14302290">
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  EIGEN chart by <a href="https://www.tradingview.com/symbols/EIGENUSD/?exchange=COINBASE" target="_blank" rel="nofollow">TradingView</a>
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<p>On the hourly chart, the EIGEN token bottomed at $3.04 on Oct. 6 and then bounced back to $3.8, its highest point since Oct. 2.</p> 
<p>It has risen above the 25-period moving average, and most importantly, it has formed a bullish inverse head and shoulders pattern. In price action analysis, this is one of the most bullish signals in the market.</p> 
<p>Therefore, there is a likelihood that EigenLayer’s token will bounce back and possibly retest the all-time high of $4.58, up by 23% from the current level.</p> 
<p> You might also like: <a rel="" href="https://crypto.news/eigen-fdv-slips-to-6-4b-in-a-victory-for-polymarket-traders/"> EIGEN FDV slips to $6.4b, in a victory for Polymarket traders </a> </p>

EIGEN has formed a bullish pattern, but two risks remain

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