- Injective protocol (INJ) might be facing waning bullish momentum as current analysis suggests.
- A breakout beyond the $29.68 level could indicate a new upward impulse, though it may not be likely.
- Currently, INJ is trading around $27.5, faced with the 50% Fibonacci retracement resistance at $29.6.
Understand the latest trends and outlook for Injective Protocol (INJ) as the crypto market shows signs of shifting momentum.
Analyzing the Descending Channel Formation
Recent technical charts for Injective Protocol (INJ) have highlighted a descending channel that has been developing since early April. As of now, the resistance level at $28.2 is being tested, which aligns with the 50% Fibonacci retracement resistance at $29.6. This alignment is crucial as it could determine whether INJ experiences another bullish impulse or continues to encounter selling pressure.
Volume Insights and Market Behavior
One notable observation from the On-Balance Volume (OBV) indicator is the persistent downtrend, which suggests that despite periodic rallies, buying strength remains lackluster. This weak demand potentially indicates that recent price upticks could merely be liquidity hunting maneuvers rather than sustainable growth. The $24.18 and mid-channel mark between $21.5-$22 are critical support levels to watch in the event of a price rejection from the current trading area.
Significance of Accumulation and Market Sentiment
According to Santiment data, the 30-day Market Value to Realized Value (MVRV) ratio stands at +19.75%, signifying that short-term holders are currently in profit, which might spur a wave of selling. Moreover, the mean coin age has been on the rise, indicating long-term accumulation across the network. The relatively low dormant circulation since mid-June further suggests that a sell-off could be on the horizon should there be a sudden spike in activity.
Spot CVD and Open Interest Trends
Data from Coinalyze indicates that although Open Interest for INJ has been on an uptrend since mid-July, the pace has begun to decelerate. Additionally, the spot Cumulative Volume Delta (CVD) has plateaued in the past four days, implying that buying pressure is easing. Despite accumulation signals pointing toward an accumulation phase, the weakening short-term sentiment and demand suggest a potential pullback in the near term.
Conclusion
In summary, while Injective Protocol (INJ) shows signs of network-wide accumulation and key market structure levels providing support, the current technical and volume indicators point toward a possible short-term pullback. Investors should closely monitor the $24.18 support level and the descending channel’s dynamics to navigate through potential market shifts effectively.
