Injective (INJ) Hoping a Reversal Amid Consolidation: What’s Next

• INJ token price hovered at the bottom and revealed consolidation.
• Technical indicators guided the neutral projections and revealed low investors’ optimism.

Injective protocol (INJ), a decentralized exchange built on the Ethereum blockchain, saw a range-bound price move throughout the week.

Most recently, Injective Protocol has shared that it will partner with the Telegram-based Toncoin (TON) project. As a result of this partnership, the INJ tokens will be bridged to the TON blockchain.

Amid the recent integration, the token has failed in gaining demand for the token and persisted in a consolidation. Despite the market volatility, the token remained flat around the 20-day EMA mark and struggled to acquire momentum.

Hovering in a notable consolidation phase, the Injective protocol token struggled to cross the $25 mark. It faced rejection from the 200-day EMA mark, leading to a significant downward move. 

During the first week of this month, the token breached the range lower support of $20. It triggered a breakdown due to the increased market volatility. However, sellers failed to extend the bearish leg.

Afterward, buyers have accumulated the token slowly & steadily, resulting in a continuous range-bound move.

Injective Poised For Reversal: Price Action Analysis

On the daily chart, the INJ token price has struggled to cross the 20-day EMA mark and has stayed below it. Amid the recent speculative move from the bottom, the lack of follow-on buying signified the low investors’ optimism.

Traded below the key moving averages, the token was eyeing a reversal and looking to re-enter the previous range above the $20 mark.

INJ Price Chart | Source: Santiment

The RSI curve stayed below the midline region, having a reading of 45 underlying the mixed cues. Similarly, the MFI index stayed in the southward region, which could have hindered INJ’s upward price movement.

At press time, the INJ token was trading at $18.47 with an intraday surge of 2.1%, reflecting a minor pullback on the chart.

@ChartingGuy, in his tweet, explained that INJ has made a structure similar to its peers and can plot its 5th rising wave above the $25 mark soon.

$INJ exactly like $RENDER and $FET

another bull market leader that is down 67% from the March highs

but all i see is a golden picket backtest for a typical wave 4 correction

this chart remains bullish as long as the wave 1 high holds at $9.98 pic.twitter.com/JoEBIilnjI

— Charting Guy (@ChartingGuy) August 17, 2024

A Tweet by @ChartingGuy | Source:X

Per the Fibonacci retracement levels, the token has an immediate 23.6% support cluster placed around the $15 mark. The next bearish leg could not be seen ahead until the downside zone was not breached.

Decline Observed In Investors’ Confidence

Per the IntoTheBlock data, the daily new addresses data recorded a decline of over 50% in a week. On the other hand, the active addresses data fell over 41.85%. Likewise, the zero balance addresses dropped over 38.46%.

This significant decline observed in the addresses represents the declining investors’ confidence in INJ. It might influence the bearish trend ahead.

Majority Are In Red

Per the data from IntoTheBlock, 29.87% of the wallet addresses at the current price levels are making profits, whereas more than 68% of the holders are facing unrealized losses.

Generally, when fewer in-the-money addresses are profitable, support is weaker than the large numbers of out-of-money addresses. It acted as resistance during the pullbacks.

Futures Open Interest Displayed Short Covering Moves

In addition to the price rise of over 2% intraday, the futures Open Interest showed a different view. As the sellers have started covering their positions, the OI shed over 6.56% to $71.07 Million, which signifies a short covering activity.

If the token continued to hover below the $25 mark, the consolidation would be continued. Also, If it breaks the $25 on a closing basis, a fresh bullish wave toward the $30 followed by the $34 mark can be seen ahead.

Conversely, If slipped below the $17 mark, immediate support zones of $15 and $12 would be a crucial base.

Disclaimer

This article is for informational purposes only and does not provide any financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.