The latest burn of Injective [INJ] tokens witnessed the elimination of more than 11,000 tokens, valued at over $280K, effectively reducing the circulating supply and enhancing the deflationary impact of Injective.
This move has sparked optimism among traders following INJ’s breakout from a prolonged descending channel, prompting a positive market sentiment.
Observers are now monitoring closely to gauge the sustainability of this momentum, which could potentially drive INJ towards higher price targets.
Technical Analysis: Breakout, Critical Levels, and Bullish Indicators
INJ has recently broken out of its descending trend, breaching a level that had previously acted as a barrier to upward price movement for an extended period.
This breakout signals a shift in market sentiment, with buyers successfully surpassing the critical resistance level at $28.44, a pivotal psychological and technical threshold. Maintaining stability above this level might propel INJ towards its next significant target at $51.90.
In addition, technical indicators support this bullish outlook. The Average True Range (ATR) shows an uptick in volatility, indicating increased interest and the potential for significant price fluctuations.
Moreover, the moving average crossover (MA 9 crossing over MA 21) has generated a bullish signal, further reinforcing confidence in the potential for continued price appreciation in INJ.
Price DAA Divergence Signals a Note of Caution
Nevertheless, on-chain metrics reveal a subtle cause for concern. The current price-DAA (Daily Active Addresses) divergence stands at -171.49%, indicating that price movements are outpacing network activity.
While this observation could raise alarms, the robust technical setup and the ongoing token burn may help offset this discrepancy. If buying pressure persists, this divergence might carry less weight among bullish traders.
Market Sentiment Indicates a Balanced Yet Positive Outlook
The INJ long/short ratio, with shorts at 50.38% and longs at 49.62%, mirrors a cautiously optimistic sentiment. Traders acknowledge the recent breakout but remain vigilant, awaiting confirmation that the $28.44 level can serve as a new support base.
As confidence increases, this sentiment could shift more decisively in favor of the bulls, especially if INJ manages to sustain levels beyond $28.44.
Driven by continuous token burns, a significant breakout above $28.44, and supportive technical signals, INJ seems well-positioned for a potential upswing.
Hence, if the bullish momentum persists, achieving the $51.90 target appears plausible and within reach in the upcoming months.