EigenLayer (EIGEN) Price Drops Sharply After Its Airdrop as Holders Dump It

EigenLayer Price continued its downward trend as the sentiment in the cryptocurrency industry worsened and as holders dumped it.  The EIGEN token fell from this week’s high of $4.58 to a low of $3.48, a 24% decline. This drop was a continuation of the sell-off that was happening in OKX’s pre-market futures

The price of EigenLayer (EIGEN) continued to decline on Friday as the sentiment in the cryptocurrency industry worsened and as holders dumped the token following its airdrop.

The EIGEN token price dropped to a low of $3.48, which was lower than the highest point this week of $4.58. This brought the total decline in the token’s price this week to more than 24%.

EigenLayer price continued to decline

The latest EigenLayer price drop happened as many token holders started converting them into fiat currencies. This is a common phenomenon when airdrops happen. For example, data showed that 41% of all zkSync token holders sold their tokens after their debut in July.

Increased selling by token holders also explains why many new airdrops like Hamster Kombat, Catizone, and PixelVerse have all dropped. Other tokens like Wormhole and zkSync have also declined sharply.

Another reason for the EIGEN price drop is the rising concern over future dilution. Data from CoinMarketCap shows that EIGEN has more than 186 million tokens in circulation out of a total capped supply of 1.68 billion.

The implication is that the unlocked tokens will start to vest periodically in the coming months, leading to more dilution. In line with this, many EIGEN holders were disappointed by the limited tokens they were awarded during the airdrop.

Finally, the airdrop happened during a period when most coins were declining. Bitcoin dropped to a low of $61,000 while the crypto fear and greed index moved to the fear zone of 36.

Is EigenLayer token a good investment?

EigenLayer is one of the biggest players in the cryptocurrency industry. It has strong fundamentals like high total value locked and number of users. Unlike meme coins, it generates substantial sums of money in fees, which will flow to stakers.

However, in the near term, there is a high likelihood that the token will continue to be in a price discovery phase as many of its initial holders sell.

As we have seen with the likes of Wormhole and zkSync, the post-airdrop dip can continue for a while.

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