Current Market Position
Injective (INJ) is currently trading at $27.5, struggling to break past the 50% Fibonacci resistance level at $29.6. This price action has coincided with a broader Bitcoin (BTC) rally, which saw BTC prices surge from $57.3k to $67.6k. Despite these gains, INJ traders are cautiously optimistic. The recent move past $24.27 broke a lower high, flipping the market structure to bullish and reaching channel resistance.
However, the question remains: can INJ sustain this momentum? The market’s current state suggests that a breakout above $29.68 could signal another upward impulse, but this scenario seems increasingly unlikely given the prevailing market conditions.
Descending Channel Dynamics
On the daily chart, INJ has been forming a descending channel since early April, marked by resistance at $28.2. This resistance is currently being tested, and the overhead Fibonacci retracement level poses a significant challenge for buyers. Despite the defense of the $20 zone over the past two months, the overall trend has been downward since late March. The rallies that have broken market structure appear to be temporary, suggesting that buyers may be weak and price rallies could be liquidity hunts.
The On-Balance Volume (OBV) indicator supports this view, continuing its downtrend and making a breakout past range highs unlikely. To the downside, the $24.18 level and the mid-channel mark at $21.5-$22 could see a price bounce if prices are rejected from the $27.5 area.
Accumulation Signals and Market Sentiment
Accumulation Indicators
The 30-day Market Value to Realized Value (MVRV) ratio at +19.75% indicates that short-term INJ holders have significant profits, which could lead to selling pressure. However, the rising mean coin age suggests network-wide accumulation, indicating that long-term holders are still confident in INJ’s potential. Dormant circulation has been low since mid-June, but a sharp increase could signal a wave of selling, which would put additional pressure on the price.
Sentiment and Demand
Market sentiment and demand for INJ are showing mixed signals. Open Interest remains in an uptrend but has slowed since July 17, indicating that the momentum may be waning. The spot Cumulative Volume Delta (CVD) has also stalled in the past four days, suggesting easing buying pressure. Despite the accumulation signals, weakening short-term sentiment and demand suggest a potential pullback in the near future.
Technical Analysis and Future Outlook
Technical Indicators
From a technical perspective, INJ’s recent price action has shown bearish tendencies after reaching a resistance point, particularly as it approached the support level at $3. This level has proven to be a reversal point, resulting in a battle between bulls and bears. A breakout above this resistance could act as a major price driver, potentially stopping the ongoing sell-off and pushing prices higher. This move might signal renewed bullish movement and increased market confidence.
On the downside, the $1.79 range serves as a crucial support zone. If INJ breaches this support, it could drop to around $1.00, which might invalidate hopes for a recovery in the near future. Conversely, if the price bounces back from this low support level, it could start a new recovery phase for the coin. This bounce could trigger liquidations and lead to a bullish movement in the near future.
Conclusion
Injective (INJ) is at a critical juncture, with its price action reflecting a mix of bullish and bearish signals. While the recent accumulation and rising mean coin age suggest long-term confidence, short-term sentiment and demand are weakening. The descending channel and key resistance levels will play a crucial role in determining INJ’s future trajectory. Investors should closely monitor these technical indicators and market dynamics to make informed decisions. As always, it’s essential to approach cryptocurrency investments with caution and conduct thorough research.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
