The cryptocurrency market is showing a sluggish trend in the second week of October, with Bitcoin struggling to maintain levels above $65,000. While most major altcoins are experiencing similar uncertainty, EigenLayer (EIGEN) has bucked the trend, surging from $3.05 to $4, marking a 32% increase. This bullish turnaround could potentially extend to the $5 psychological level, supported by a reversal chart pattern and significant whale accumulation.

Recent on-chain data from Lookonchain reveals that two new wallets, likely belonging to the same entity, collectively spent 2,471 ETH (approximately $6.03 million) to acquire 1.63 million EIGEN tokens. One address spent 1,234 ETH ($3.01M) to purchase 791,845 EIGEN at an average price of $3.8, while the second wallet invested 1,237 ETH ($3.02M) to buy 835,391 EIGEN at $3.61 per token.

In financial markets, large-scale buying by whales often coincides with an asset reaching its bottom and potentially kickstarting a high-momentum rally. This recent accumulation of EIGEN as it pushed past $3.8 suggests the possibility of sustained recovery.

After experiencing a significant drop upon its Coinbase listing, EigenLayer found support at $3.036 before stabilizing. The 4-hour chart reveals an inverted head-and-shoulders pattern formation, typically considered bullish. EIGEN has broken out above the $3.66 neckline resistance, with a post-retest reversal forming a morning star pattern.

Currently trading at $4.061 with a market cap of $747.5 million, EIGEN faces its next crucial resistance at $4.258, followed by the psychologically important $5 level. The 20-day and 50-day exponential moving averages are trending upward, potentially offering dynamic support for buyers.

However, multiple rejections at the $4.258 level indicate significant overhead supply. Given the overall sluggish trend in the crypto market, a potential reversal from this resistance could push EIGEN below the $3.66 neckline, invalidating the bullish outlook.

Investors should note that while EigenLayer shows promising signs, the broader crypto market remains uncertain. As always, thorough research and caution are advised when making investment decisions in the volatile cryptocurrency space.