About ten days after EigenLayer listed its native token, EIGEN, on exchanges, its price attempted to revisit the launch price, fueled by a notable rise in Open Interest (OI). This surge suggested strong interest among traders. 

However, EIGEN’s OI has plunged to its lowest level since its launch. What does this imply for the altcoin’s value?

EigenLayer Goes From Hype to Decline

EIGEN officially launched on October 1, with its price at $4.53. By October 6, the price dropped to $3, fueled by rising selling pressure from airdrop recipients. But it did not take long for EIGEN’s price to bounce, as it retested $4 again four days later.

BeInCrypto’s findings reveal that EigenLayer’s rebound was fueled by a significant increase in Open Interest (OI), which rose above $137 million during that period.

A high OI typically reflects heightened speculative activity, suggesting that more traders are actively participating and committing capital to the altcoin. This uptick in OI often correlates with increased volatility and, in many cases, upward price momentum.

Conversely, when Open Interest drops significantly, as seen with EigenLayer’s OI currently at an all-time low of $71.81 million, it can indicate waning interest from traders and a lack of fresh capital entering the market. 

Read more: What Is EigenLayer?

Low OI often correlates with diminished buying pressure, making it more challenging for the price to sustain upward momentum. Following this development, EIGEN’s price dropped by 25%.

Additionally, active address metrics for EigenLayer reveal a significant drop in engagement, suggesting diminishing demand. 

Data from Santiment shows that just a day after EIGEN be

Go to Source to See Full Article
Author: Victor Olanrewaju