EigenLayer teeters at the dollar: Fade the bounce, target the $1 liquidity sweep

Comprehensive multi-timeframe technical analysis for EigenLayer (EIGEN)

1. Market structure and trend context

• Daily trend: Clear bearish structure since the Oct 7 high near 1.97. Sequence of lower highs and lower lows accelerated after the Oct 10 liquidation wick (low ~0.633, close ~1.199), followed by a stair-step decline: 1.3646 (Oct 12), 1.3989 (Oct 13) lower high, then cascading closes down to 1.0807 (Oct 21) and today’s drift to ~1.046. This is a textbook markdown phase after an early-October distribution.
• 4H/1H trend: Persistent down-channel. Today’s intraday action made successive lower highs: ~1.0947 (15:00), ~1.0830 (16:00), brief bounce to ~1.0620 (19:00), then faded to ~1.046. Microstructure remains bearish with rallies sold.
• Key levels from structure:
  • Supports: 1.044–1.050 (today’s floor zone), 1.015 (pivot S1 from prior day), psychological 1.00, then 0.95–0.98 (August congestion zone).
  • Resistances: 1.062–1.076 (intraday 38.2–61.8% retrace zone of 1.0948→1.0449 swing), 1.08–1.10 supply, 1.12, 1.15, 1.20.

2. Moving averages and trend-following signals

• Daily SMAs/EMAs (approx.):
  • 7-SMA ≈ 1.151 (well above price) – bearish.
  • 20-SMA trending down, estimated ≈ 1.45–1.55 after the early-Oct highs – price far below – strong bearish trend.
  • 50-SMA is above the 20-SMA regionally earlier but flattening to down; price is below all of them – full bearish stack.
• EMAs (12/26): 12-EMA < 26-EMA and diverging – negative momentum. Any rallies toward 1.08–1.12 are likely to encounter dynamic EMA resistance.
• Trend implication: Favor shorting into strength until daily closes reclaim and hold above the 20-EMA/20-SMA zone for multiple sessions.

3. Momentum oscillators

• Daily RSI(14): Likely in low-to-mid 30s after consecutive down closes; mildly oversold but not extreme. In downtrends, RSI can hover 20–40 for extended periods; oversold bounces tend to be short-lived.
• 1H RSI(14): Dips sub-30 on sell waves, rebounds to 40–45 on weak bounces – consistent with bear control.
• Stochastic (1H): Oscillates out of oversold to mid-range during shallow bounces; no sustained momentum shifts.
• Read: Momentum supports selling rips rather than bottom-fishing. Any bounce to 1.06–1.08 that stalls with RSI failing above ~50/55 on 1H is a high-prob short area.

4. Volatility and range analysis

• ATR(14) daily (approx.): Elevated post-Oct 10. Realistic near-term daily move ≈ 0.08–0.14 given recent ranges, allowing a plausible 24h span of roughly 0.99–1.09.
• Today’s intraday range compression near the lows with occasional quick fades suggests supply sitting above 1.06–1.08 and bids thin below 1.04–1.02 until the big $1 round number.

5. Bollinger Bands (daily)

• With 20-period basis well above current price, lower band is near current zone (expanded by earlier volatility). Price riding the lower band in a strong trend is not a reliable long signal; it often indicates trend persistence with only minor mean-reversion bounces.

6. MACD

• Daily MACD below zero and below signal with widening negative histogram earlier this week; any histogram contraction so far reflects slowing downside, not reversal confirmation. The bear signal remains intact until a bullish cross above the signal with higher lows in price.

7. Ichimoku

• Daily: Price below cloud; Tenkan < Kijun; Span A < Span B; future cloud red – fully bearish. Kijun baseline likely far above (~1.6±), showing strong mean distance.
• 1H: Price under cloud, cloud angled down; repeated rejections near the underside on minor bounces – supports selling rallies.

8. Volume and OBV

• High-volume distribution early Oct near 1.9–2.0, then large liquidation on Oct 10; subsequent declines on above-average volume with tepid volume on up-days. OBV is trending down, confirming sellers dominate.
• Today’s hours: Participation picks up on down legs (e.g., 19:00 rejection, then fade); rallies have lighter volume – classic bearish volume signature.

9. Fibonacci mapping

• Intraday swing (1.0948 high → 1.0449 low):
  • 38.2% ≈ 1.0635 (tagged and sold at ~1.062 around 19:00)
  • 50% ≈ 1.0699
  • 61.8% ≈ 1.0763 This 1.063–1.076 retracement box is the first sell zone. A secondary sell pocket sits at 1.08–1.10 (prior breakdown shelf/MA confluence).
• Larger swing (Oct 12 1.3646 → Oct 21 1.0395): Price is below the 23.6% (~1.114), underscoring the weakness.

10. Pivot points (classic, from Oct 21 H/L/C = 1.1953/1.0395/1.0807)

• Pivot P ≈ 1.1052; R1 ≈ 1.1709; S1 ≈ 1.0151; R2 ≈ 1.2610; S2 ≈ 0.9494.
• Current price sits between S1 and P, leaning toward S1 – a bearish bias with magnet risk to the 1.015–1.00 zone.

11. Pattern diagnostics

• Bear flag/descending channel on intraday timeframes: Price action forms tight countertrend rises that fail around fib levels and prior breakdowns. Until the upper channel line (currently ~1.08–1.10 region) is broken and held, the path of least resistance remains down.
• No credible reversal pattern (no double bottom confirmed, no bullish engulfing on daily closes). Wicks favor upside rejection over downside rejection.

12. Wyckoff lens

• Post-distribution markdown underway since mid-September’s strong markup concluded. We have not seen a spring or terminal shakeout at the round-number $1. A proper accumulation often features a spring and test – not visible yet. The more likely path is a probe of liquidity at $1 before any meaningful base.

13. Liquidity and round-number effects

• The $1 handle is a major psychological and likely orderbook liquidity pool. Price is gravitating toward it. Expect sharp reactions near 1.00: either a quick sweep and bounce or a slippery continuation to 0.98/0.95 if bids don’t absorb.

14. Probabilistic 24h outlook

• Base case (~55%): Sell rallies into 1.06–1.08, roll over to test 1.02–1.00; intraday low prints in 0.99–1.02, with a late bounce toward ~1.03–1.05.
• Range-hold (~30%): Chop 1.04–1.08 as the market builds energy; repeated failures near 1.07–1.08 keep pressure on 1.04.
• Squeeze (~15%): A stop-run pushes to 1.09–1.12 (cloud/MA underside). Unless sustained, that would be a better short entry area; failure there risks a swift move back to 1.03–1.05.

15. Trade thesis and execution plan (short bias)

• Rationale to short: Multi-timeframe downtrend, bearish MA stack, MACD negative, RSI unable to reclaim bull ranges, repeated fib rejections, price below Ichimoku cloud, OBV down, and a clear draw toward the $1 liquidity. The best reward/risk comes from selling into a bounce into the 1.07–1.08 fib/MA pocket rather than shorting the absolute lows.
• Optimal entry: Place a limit sell near 1.074 (just under the 61.8% of the 1.0948→1.0449 swing at 1.0763 and beneath local supply), improving fill probability while staying inside resistance.
• Take-profit objective (24h): 1.002, capturing the likely liquidity tap near par. This sits just above the psychological figure, increasing the chance of fill on a sweep.
• Risk management (informational): A logical protective stop would sit above 1.088–1.092 (above 1h supply and intraday highs), preserving a favorable reward/risk profile (~0.072 vs ~0.047 risk from 1.074→1.002 TP and 1.074→1.092 stop, RR ≈ 1.53). If a squeeze extends to 1.10–1.12, a second-chance fade is higher probability but entails wider risk.

16. Invalidations and what would change my mind

• A strong 1H/4H close above 1.10–1.12 with rising OBV and MACD crossover (12>26, histogram >0) could morph this into a more durable bounce, targeting 1.15–1.20. Without that, rallies are countertrend.

Bottom line

• The confluence of bearish trend signals and the gravitational pull to $1 favor a short-on-strength approach. Expect a tactical bounce attempt into 1.06–1.08; use it to position short, targeting a $1 sweep within the next 24 hours.