EigenLayer’s Hammer Reversal: VWAP Reclaim Points to a 1.88 Test Within 24 Hours

EigenLayer (EIGEN) – 24h Trading Playbook and Full Technical Dissection

Summary view: After a strong mid-September breakout to 2.087, EIGEN retraced to a 50% Fibonacci pullback near 1.60 today, and printed a high-volume daily hammer that reclaimed the 38.2% retracement (~1.746). Intraday flows show a classic liquidity sweep under support (spring) followed by a VWAP reclaim and higher lows on the 1H. With rising participation into the close and a well-defined resistance band at 1.84–1.88 (R1/past supply/23.6% Fib), the next 24 hours favor a drift higher with a test of 1.87–1.90. Optimal tactic: buy the dip toward 1.74–1.75 with a target near 1.885.

Step-by-step analysis and tools

1. Price action and market structure (HTF → LTF)

• Daily trend: Uptrend from late August (~1.19) to Sep 18 high (2.087). Pullback days (Sep 19–21) created a sequence of lower highs, but today (Sep 22) produced a decisive intraday washout to 1.6005 and close near the open at 1.765, forming a daily hammer. That’s a reversal-type candle when it occurs after a multi-day pullback and at a Fibonacci confluence.
• Higher highs/lows context: The larger structure remains bullish: HH on Sep 18 (2.087), HL on Sep 15 (1.563), and today likely another HL around 1.60–1.66. The uptrend is intact unless price loses 1.56–1.60 decisively.
• 4H/1H structure: Today’s intraday lows step higher: 06:00 ~1.6005 → 07:00 ~1.661 → 08–10:00 ~1.705–1.738 → 17–19:00 ~1.739–1.759. That is a sequence of higher lows with capped highs 1.84 area; a rising-channel or ascending triangle-like behavior into overhead supply.

2. Volume, liquidity, and VWAP

• Volume expansion: Today’s daily turnover is heavy again (227M during the session so far), comparable to the breakout phase, signaling meaningful participation on the rebound. High volume on a recovery day adds credibility to the hammer.
• Liquidity sweep: The sharp break to 1.60 flushed stops below 1.70/1.66 and then reversed. This “spring” behavior (Wyckoff) often precedes a markup if price can hold above reclaimed levels (notably the 38.2% Fib at ~1.746).
• VWAP dynamics (intraday): Price spent the U.S. session riding/reclaiming VWAP around the mid-1.74–1.76 zone, rallying to 1.84 and settling near VWAP into 21:00 UTC. A pullback to VWAP/Kijun area (1.74–1.75) is a high-quality long entry for a day trade aiming for overhead supply.

3. Fibonacci mapping (swing low Aug 31 ≈ 1.1938 to swing high Sep 18 ≈ 2.0874)

• 23.6%: ~1.8765 (first major resistance on rebounds)
• 38.2%: ~1.7457 (key reclaimed support today)
• 50%: ~1.6406 (today’s washout tested near this area; low 1.6005)
• 61.8%: ~1.535 (deeper support if another leg down) Interpretation: Reclaiming and holding above the 38.2% at ~1.746 after tagging a near-50% retrace is classic bullish behavior, targeting a test of the 23.6% (~1.877) next.

4. Classical support/resistance and pivot levels

• Nearby supports: 1.74–1.75 (Fib 38.2 and intraday VWAP/Kijun area), 1.70 (psychological/S1 from prior day’s pivots), 1.66 (intraday pivot and higher-low shelf), 1.60 (today’s spring low; strong demand showed).
• Overhead resistance: 1.84–1.88 (hourly supply cap + daily R1/23.6% Fib), 1.95–2.00 (round number + prior reaction), 2.08–2.09 (recent high).
• Pivot math using Sep 21 (H=1.91499, L=1.75663, C=1.76346):
  • P ≈ 1.8117, R1 ≈ 1.8668, S1 ≈ 1.7084, R2 ≈ 1.9700. Today pushed up toward P, rejected just below R1, normal behavior post-spring. R1 (~1.867) aligns tightly with the 23.6% Fib (~1.877) → strong confluence resistance near 1.87–1.88.

5. Momentum and oscillators (qualitative from tape and structure)

• RSI (daily): Likely cooled from overbought (>70 on Sep 18) into the mid-50s/low-60s after the pullback; today’s rebound suggests momentum basing and turning up. That supports a 24h bounce.
• Stochastics (1H/4H): Likely crossed up from oversold after the morning sweep, consistent with higher lows. This favors continuation pushes into resistance on dips.
• MACD (4H/1H): Histogram appears to have put in a positive inflection intraday; a 1H bullish cross typically targets local supply (1.84–1.88). On daily, MACD remains above zero post-breakout, with a pullback in momentum that can re-expand if price clears 1.84–1.88.

6. Moving averages and bands

• EMAs (daily): Price remains above rising MAs (20D > 50D > 200D), consistent with trend continuation. Post-spike mean reversion occurred; today’s hammer above the 20D region suggests buyers defending the trend.
• 1H EMAs: Reclaimed and fanning upward into the U.S. afternoon session. Pullbacks to the 20/50-EMA cluster often get bought in this posture; that cluster sits near 1.74–1.76.
• Bollinger Bands (daily): Bands widened on the breakout; price reverted from the upper band to near the mid/low band region and bounced. With volatility still elevated, reversion toward the upper half of the band (1.85–1.90) in 24h is plausible.

7. Ichimoku (trend filter)

• Daily: Price likely remains above cloud with Tenkan/Kijun rising after the mid-month breakout. The pullback tagged equilibrium; today’s close near open with long lower wick is a constructive sign. 1H: Reclaim over Kijun/Tenkan into New York session suggests pullbacks toward Kijun (~1.74–1.75) will be defended.

8. Wyckoff and liquidity framework

• Spring and test: The breakdown to 1.6005 likely was a spring below widely watched levels (1.70/1.66). The subsequent reclaim and higher-low sequence is a successful test. Next expectation is a markup attempt to resistance (1.84–1.88). Failure would be indicated by a sustained move back below 1.74 (no demand scenario), invalidating the spring.

9. Volatility and risk (ATR, expected range)

• Recent daily ATR is elevated (~0.15–0.20). A 24h expected move around ±0.10–0.15 from current (1.765) sets a reasonable range: 1.66–1.90, with a bullish skew given structure and candle.

10. Confluence score (bullish vs bearish in next 24h)

• Bullish:
  • Daily hammer on high volume at 50%→38.2% Fib confluence
  • Reclaim of 38.2% and VWAP; hourly higher lows
  • Uptrend intact on higher timeframes; EMAs supportive
  • R1/23.6% cluster above as a magnet
• Bearish:
  • Strong supply 1.84–1.88 (multiple rejections today and prior days)
  • Volatility still high; failure to hold 1.74 risks another sweep to 1.70/1.66 Net: Bullish bias for a controlled push into 1.86–1.90.

Trade plan (next 24 hours)

• Bias: Buy dips (Long).
• Optimal entry: 1.74–1.75 zone (Fib 38.2% + VWAP + 1H Kijun/EMA cluster). Proposed limit: 1.748.
• Profit target: 1.885 (inside the 1.87–1.90 resistance cluster; aligns with R1/23.6% Fib). Scale-outs near 1.84 possible, but target set at 1.885 for the trade plan.
• Invalidation/stop (risk control – guidance): Below 1.70 or more conservatively below 1.66 if allowing for a stop-sweep. For a tighter day-trade, 1.698–1.705 protects capital while respecting structure.
• Probability estimate: ~60–65% likelihood of tagging 1.86–1.90 within 24h if 1.74 holds on retests.

Alternative scenario (risk to the bullish view)

• If 1.74 fails decisively and price spends time under 1.708 (yesterday’s S1) with rising volume, expect a rotation to 1.66 and potentially a full retest of 1.60 (50% retrace). That would postpone the upside for another session and shift bias to neutral until a fresh reclaim.

Bottom line

• The combination of a high-volume daily hammer at the 50% retracement, immediate reclaim of the 38.2% level, and supportive intraday structure argues for a buy-the-dip approach. Expect a probe into 1.84–1.88, with 1.885 as an achievable 24h take-profit if 1.74 support holds.