Injective [INJ] Price Plummets 73% from All-Time High, Potential Rebound Ahead?

Injective’s [INJ] value has been on a steady decline since hitting an all-time high of $53 back in March 2024. Subsequently, the digital currency has witnessed a significant plummet of almost 73%, dropping to its lowest point in 15 months following a prolonged downward trend.

Despite this downward trajectory, recent price movements suggest that traders can capitalize on the short-term price fluctuations of INJ during this downturn.

Is a Breakout Imminent for INJ Bulls?

Since reaching its all-time high, INJ has been trending sharply downwards, mirroring the broader cryptocurrency market’s movements.

The altcoin’s retreat from the $34 resistance level paved the way for bearish sentiment. Additionally, the formation of a falling wedge pattern on its daily chart indicates a potential bullish breakout in the near future.

However, this pattern caused the price to dip below its 20-day, 50-day, and 200-day EMAs, confirming a notably bearish outlook.

Furthermore, the recent occurrence of a death cross (the 20-day EMA crossing below the 200-day EMA) further solidified the ongoing downtrend.

It is notable that on the 3rd of February, INJ touched a 15-month low. Following this, the digital asset saw a sequence of green candles, although it struggled to surpass the $15.6 resistance level represented by the 20-day EMA.

A decisive breakthrough above this barrier could potentially spark a robust recovery towards the next barrier in the $18 to $20 range. Alternatively, if market sentiment worsens, a rapid decline could test levels around $9.6 to $10.

With the Relative Strength Index (RSI) still below the 50 threshold, indicating insufficient buying pressure, crossing this level decisively could prompt buyers to adopt long positions.

INJ 3.0 Upgrade Potentially Fueling Optimism

Injective recently greenlit its INJ 3.0 upgrade, intending to significantly diminish the token’s circulating supply by the first quarter of 2026.

This deflationary initiative could gradually tighten the token’s supply, potentially boosting INJ’s valuation if demand surges, particularly in the event of a bullish shift in the broader market sentiment.

Derivative Insights Point Towards Positivity

INJ’s derivatives trading volume surged by 18.63% to reach almost $199 million, while Open Interest declined by 7.5% to approximately $105 million.

The increase in trading volume combined with the decrease in Open Interest often signifies the closing of positions, setting the stage for potential new long positions if bullish sentiment resurfaces.

With the Long/Short Ratio on Binance standing at 2.11, traders’ short-term optimism is reaffirmed.

An analysis of the price action around the falling wedge pattern boundary and the 20-day EMA should aid traders in identifying the immediate upward momentum of the altcoin.

If market sentiments, particularly those surrounding Bitcoin, continue to remain uncertain, the possibility of sustained downward movement could escalate.

Disclaimer: The opinions expressed in this article are solely the author’s and do not constitute financial, investment, or trading advice.