Injective [INJ] defied the downward trend seen in September by experiencing a surge of more than 40%, reaching $23 last week. However, a correction in October wiped out a significant portion of those gains, causing INJ to regress to previous levels.
The Injective network recently announced significant milestones, leading to a notable increase in its user base and a 6% uptick in INJ’s value.
Despite this brief upswing, the rally was halted by a bearish MACD crossover on the daily chart. Following this development, CryptoCrypto explored the possibility of this pullback triggering a breakout, as predicted by many analysts.
Scarcity of INJ Tokens
Injective’s innovative burn auction, introduced with INJ 2.0 in 2023, has streamlined the token burning process.
This feature allows individual users to directly contribute to the Auction Fund, making token burning more accessible within the INJ network.
Recently, the network announced the burning of an additional 200K INJ tokens, a move expected to have a positive long-term effect on INJ’s price performance.
However, as noted by CryptoCrypto, the recent price pullback has caused many INJ holders to incur losses. A considerable number of these investors own 1.66 million INJ tokens purchased at an average price of $22, which is below the current market price.
If other holders view the current price as the market’s bottom and opt to buy during the dip, these investors might be inclined to wait before reaching a break-even point, especially considering the network accomplishments mentioned earlier.
If this trend persists, Injective’s next significant challenge will be transforming the previous $23 resistance level into support. If successful, the subsequent resistance could be expected around $30.
Whales Backing this Concept
This week, significant whale groups intervened to prevent INJ from experiencing a deeper decline, potentially dropping the price to $18. Their actions resulted in a notable 7% increase, propelling INJ back to $20.
Data indicates that around 45K INJ tokens were transferred from exchanges to whale wallets, accumulated during the downturn, effectively establishing the $18 level as support.
While this development is positive, a reduction in whale holdings might present a challenge for bulls aiming to sustain the $23 level.
In conclusion, this accumulation hints at a possible market bottom, encouraging holders facing losses to retain their assets while attracting profit holders driven by FOMO, crucial for solidifying the $23 support.
Nevertheless, if whales withdraw their support, significant players might lose faith in a recovery, potentially causing INJ to regress to $18.
Therefore, monitoring whale activity is crucial for a breakout. Should whales maintain their long-term commitment, their confidence could facilitate the retention of the $23 support by bulls, paving the way for the next resistance level at $30.