Step-by-Step Technical Analysis: EigenLayer (EIGEN)

1. Price Structure and Trend Analysis

• Long-term trend (last 3 months):

  • The price has seen substantial volatility, with a strong bull run from below $0.80 in early April to a high near $1.80 in late May. Following this, there's clear evidence of a major correction.
  • Recent daily closes suggest a market struggling to find clear direction, with a sequence of sharp swings and failed attempts to sustain highs.

• Short-term trend (past week):

  • After peaking at $1.62 (June 4), a swift sell-off to $1.29 occurred, displaying high volatility.
  • The closing price as of June 5, 21:00 UTC is $1.2967, notably lower than previous highs.

• Volume Analysis:

  • There is a significant correlation between price spikes and volume surges (notably, May 8–May 29 and again June 2–June 4). The correction from highs is accompanied by shrinking volume, likely indicating exhaustion from buyers.

2. Chart Patterns

• Double Top (May 23 & May 29 near $1.60–$1.79):
  • This is a classic reversal pattern seen on the daily chart. The neckline break occurred on May 30 at $1.29, signaling further downside.
• Bearish Engulfing Candles (June 4 & 5):
  • Consecutive large red candles reinforce the presence of strong sellers.

3. Candlestick Analysis (Hourly & Daily)**

• Hourly:
  • A rapid sequence of lower highs and lower lows throughout the last 24 hours. Early June 5 saw a rebound attempt fail just above $1.51; the subsequent hours gave way to gradual and then sharp selloff.
  • The sharp drop from $1.49 to $1.29 in the evening hours is a clear sign of failed support and panic selling.
• Daily:
  • Today's candle (so far) is a long-bodied red candle, possibly the start of a new bearish swing.

4. Support and Resistance Levels

• Key Support:

  • $1.29: Intraday low and current close; key for short-term bulls.
  • $1.20–$1.23: Previous daily close area (May 31/June 1), could act as the next bounce zone.

• Key Resistance:

  • $1.50–$1.53: Recent failed bounce (June 4/5), strong cluster of previous highs.
  • $1.38–$1.42: Intermediate resistance from failed attempts to break higher every local retracement.

5. Moving Averages

• 50-period (Daily): Approx $1.35–$1.38 (by visual estimation). Price currently below this zone, suggesting medium-term bearishness.
• 200-period (Daily): $1.10–$1.15. Well below current price, but if the down move accelerates, this becomes longer-term support.
• 10/20-period (Hourly): Flipped negative, pointing down over last 24 hours, increasing bear momentum.

6. RSI and Momentum Oscillators

• Daily RSI: Estimated to be falling toward the 40-35 region (specific RSI not given, but price and structure suggest weakening momentum after overbought conditions between May 20–29).
• Hourly RSI: Likely oversold or approaching oversold; could imply a weak technical bounce but not a reversal yet.

7. MACD

• Visual estimation suggests a recent bearish cross on both daily and hourly timeframes, aligning with the failed rally and breakdown structure.

8. Fibonacci Retracements

• Swing High ($1.79) to Swing Low ($1.29):
  • 38.2% retracement: ~$1.45
  • 50% retracement: ~$1.54
  • 61.8% retracement: ~$1.62
  • Price failed at these Fibonacci levels during retracement, confirming the bearish rejection.

9. Volume Profile

• Highest volume zones were at $1.50–$1.60 range (by dollar-basis volume on recent days), now acting as a resistance shelf. Lower volume below $1.30 means moves can get accelerated due to thin liquidity.

10. Volatility & ATR

• Average True Range (ATR) for the last 14 periods (estimated from high/low ranges) is around $0.10–$0.15, indicating a medium/high-volatility environment.

11. Sentiment/Orderflow

• Aggressive selling seen after failure at $1.50–$1.62, with little evidence of large-scale accumulation at current levels.
• No significant wicks or V-shaped bottoms that would imply strong demand is stepping in.

12. Combined Outlook & Price Prediction

• Momentum has definitively shifted bearish. The breakdown below $1.50 support and the rapid move to $1.29, coupled with a failed recovery attempt and declining volume, signal that buyers are exhausted, and sellers dominate.
• Projection: The likely path over the next 24 hours is continued downside, with possible minor pauses at $1.23–$1.25 and then further downside toward $1.15–$1.20 if panic accelerates.
• Risk: The main risk to a short position is a quick technical bounce due to short-term oversold conditions. However, without evidence of strong buying, such rallies would likely be limited to $1.38–$1.42.

13. Trading Decision and Execution Plan

• Bias: Bearish bias is strongly established.
• Trade Setup: Optimal short entry would be on a minor bounce toward $1.32–$1.34 (allowing for a tighter stop and better reward/risk), but entering near market ($1.30) is justified given momentum.
• Target: $1.18 as primary target, representing the next major support zone and lining up with previous consolidation lows and high-volume base.
• Stop Loss (for reference, not requested): A prudent stop would be above $1.38 (prior minor resistance/failure zone).

---

Conclusion:

Market structure, volume, momentum, and technical triggers all suggest EIGEN is entering a new bearish swing phase. A short trade is favored, targeting the $1.18 support area with an optimal entry between $1.30 and $1.32.

Recommendation: Sell (Short Position) at $1.32, Target $1.18