Could Injective’s native token, INJ, be gearing up for a significant breakout? Recent data from on-chain analysis has unveiled intriguing discoveries that point towards a possible major movement for the token.
Against the backdrop of a diminishing BTC dominance, Injective appears to be attracting liquidity flows as the cryptocurrency liquidity landscape undergoes a period of heightened rotation. Investors are particularly interested in cryptocurrencies and tokens that show substantial upside potential, especially those that have recently underperformed.
Within the Injective protocol ecosystem, the native token INJ has experienced a notable uptick in trading volume. Over the last 24 hours, the volume spiked to $741.29 million, representing the highest surge seen in the past 8 months and the second-highest for the year 2024.
It is pertinent to note that despite the surge in volume, Injective’s Total Value Locked (TVL) has struggled to register significant growth in recent months.
The notable spike in volume indicates a flurry of trading activities involving the INJ token throughout the current week. This surge aligns with Injective’s strong position in the realm of crypto projects exhibiting high levels of social activity.
The uptick in Injective’s social engagement suggests a growing recognition and visibility for the network and its native token during this period. However, the crucial question remains: does this heightened interest translate into a bullish momentum?
INJ Tests Key Resistance Level Once Again
The recent surge in volume may be correlated with the uptick in bullish momentum for INJ.
Indeed, INJ experienced a remarkable 14.35% surge during the Tuesday trading session, propelling it towards the previous zone of support and resistance around the $31 mark.
Will the price of INJ break above the resistance level? Currently, it has retraced by 6.07% to reach a price of $28.89 at the time of this analysis.
However, the prevailing bearish sentiment echoes the negative spot flows observed for INJ over the past few days, indicating a trend of profit-taking among investors.
The surge in spot outflows confirms the short-term profit realization, dampening expectations for a significant breakout. Despite recent highs, Injective may still be undervalued. Notably, the low Open Interest in the derivatives segment could be a factor impeding a breakthrough of the current resistance level.
Injective’s Open Interest reached $176.32 million in the past 24 hours, significantly lower than the peak Open Interest of $308.25 million observed on March 13.
The subdued resurgence in TVL might signal a cautious stance among investors, despite the surge in volume and social activity.