EigenLayer native token EIGEN has broken out of a downward channel. This suggests a potential rally ahead. Technical analysis from World of Charts points to a potential price target based on the chart structure.
The EIGEN/USDT chart has been trading within a descending channel for some weeks, forming a pattern of lower highs and lower lows that signaled a consolidation phase. This consolidation appears to have finally resolved with a decisive move upward.
The price action shows EIGEN breaking above the upper boundary of this channel. This marks a technically significant event that often precedes continued upward movement.
The breakout wasn’t just a minor breach – it came with notable price acceleration, suggesting accumulation by larger market participants. This kind of price action typically indicates renewed interest and confidence in the asset.
What you'll learn 👉
Target Zones and Key Levels to Watch
Following this breakout, World of Charts now expects EIGEN to move toward the 2.10-2.20 USDT range. This target isn’t arbitrary; it’s calculated by measuring the width of the channel and projecting it above the breakout point and the next resistance. A common technique in technical analysis for determining potential price objectives.
Before reaching that target, EIGEN will likely encounter resistance in the 1.90-2.00 USDT zone. This area represents both a psychological threshold and a prior consolidation zone where selling pressure may emerge. How price behaves at this level will be crucial – a strong push through would confirm the bullish momentum, while rejection could lead to a temporary pullback.
What Needs to Happen for Confirmation
The initial breakout is promising, but several factors need to align for the rally to fully materialize. First, EIGEN must maintain its position above the breakout level. The level is now expected to serve as support. A retest of this level with a strong bounce would provide additional confidence in the breakout’s validity.
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Despite the positive outlook, traders should remain cautious. False breakouts do occur in cryptocurrency markets, particularly during periods of low liquidity. If EIGEN fails to hold above the breakout level and falls back into the channel, the bullish scenario would be invalidated, possibly leading to further downside.
Market-wide sentiment could also impact EIGEN trajectory, regardless of its technical setup. A general market downturn could overwhelm token-specific factors, while positive industry developments could accelerate the anticipated move.
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