I will never add support for that horrible blowfish text encryption within AlcoBot for several reasons.
a) It uses the ECB cipher mode, which is terrible (I think there's a CBC implementation underway).
b) Most users distribute or continually give away the channel key.
c) An IRCD with SSL support is far more secure and reliable.
Anyway, as EwarWoo mentioned, there are plenty of "wrapper" scripts that allow an Eggdrop to function in a blowfish-encrypted channel.
You could try
Blowcrypt by poci/PERPLEX. However, the current versions of Blowcrypt (2.5 and 3.0) have a few bugs in them that prevent AlcoBot from working properly. I took the liberty of fixing the bugs and submitting the patches to poci, in the meantime you can download the fixed version from
http://www.alcoholicz.com/scripts/blowcrypt/.