After experiencing a noteworthy 9.33% increase over the last month, the Injective Protocol (INJ) seems to be losing momentum, with a 5.06% decline in the previous week’s trading sessions. Daily losses have exacerbated this decline, with an additional 1.60% decrease as changing market sentiment exerts downward pressure on its valuation.
Could Injective Protocol’s TVL Surge Stimulate a Price Recovery?
As reported by Chainbroker, there has been a remarkable 61.2% surge in the Total Value Locked (TVL) of the Injective Protocol over the past seven days, pushing the metric to $2.52 billion—an evident signal of the increasing trust in its ecosystem.
TVL, a pivotal metric for assessing DeFi protocol performance, represents the total value of assets staked, lent, or provided as liquidity. While such surges often align with upward price movements, the scenario with INJ differs from the norm.
Despite the substantial growth in TVL, INJ’s price has dipped by 5.06% during the same timeframe, indicating a decrease in confidence among market participants.
Further analysis attributes this price decline to continuous selling pressure from retail traders, overshadowing the blockchain’s expanding utility.
Retail Traders Take a Bearish Stance on INJ
Data from IntoTheBlock reveals an uptick in selling activity, with bearish sentiment among retail traders becoming more pronounced.
The average transaction size, which indicates the mean value of daily transactions, has dropped over the past week, stabilizing at $6,419.46. Such sluggish movement often signifies reduced engagement from retail traders, suggesting a cautious or bearish market outlook.
This deceleration is further supported by a 15.94% decrease in Daily Active Addresses (DAA) during the same period. A drop in DAA typically implies diminishing interest and increased selling pressure, both contributing to INJ’s recent price slump.
Additionally, the prevailing bearish market sentiment is mirrored in long liquidations totaling $754,270, as traders are compelled to close positions amidst the ongoing downward momentum.
The market pressure pushing downward is unmistakable, with retail-driven selling playing a substantial part in Injective Protocol’s recent challenges.
Whales Exercise Caution, Resulting in Uncertain Market Direction for INJ
Large investors, often referred to as “whales,” have been relatively inactive of late, with only one significant transaction noted in the past 24 hours and a modest total of 22 substantial transactions over the last seven days.
Such minimal activity implies that whales are currently hesitant, refraining from making market-altering maneuvers.
Typically, a surge in substantial transactions would indicate a more definitive trend: an increase coinciding with a price decline signifies bearish sentiment, while a rise coupled with a price upturn suggests bullish momentum.
The occurrence of either of these scenarios could have a pivotal impact on shaping the next significant market move for INJ, underscoring the significance of whale activity in the days ahead.