- INJ stakeholders lost significant gains made during the September rally.
- Now hopes for an outbreak hinge on a key factor.
injective [INJ] defied September’s bearish trend and rose over 40% to $23 last week. However, a price correction in October erased much of these gains, causing the INJ to return to previous levels.
The Injective network has recently been introduced announced significant milestones, leading to a remarkable increase in the user base and a 6% increase in INJ’s value.
Despite this brief bounce, the rally was cut short by a bearish MACD crossover on the daily chart. After this, AMBCrypto investigated whether this retracement, like many, could catalyze a breakout analysts anticipate.
INJ is scarce
Injective’s innovative burn auction, introduced with INJ 2.0 in 2023, has simplified the token burning process.
For context, it allows individual users to contribute directly to the Auction Fund; the INJ Network has made token burning more accessible.
Recently the network announced burning another 200,000 INJ tokens, a move that is expected to positively impact INJ’s price action in the long term.
However, as AMBCrypto noted, the recent price retracement has pushed many INJ holders into a losing position. A significant portion of these investors account for 1.66 million INJs, acquired at an average price of $22, which is lower than the current trading price.
Source: IntoTheBlock
If other holders see the current price as a market bottom and decide to buy the dip, these investors may have an incentive to wait to break even, in addition to the network performance mentioned earlier.
If this trend continues, the next big test for Injective will turn the previous resistance at $23 into support. If they succeed, the next resistance could be around $30.
Whales support this idea
This week, large cohorts of whales intervened to prevent INJ from experiencing a deeper pullback, which could have pushed the price down to $18. Their efforts led to a remarkable 7% gain, pushing the INJ back up to $20.
The chart below shows that approximately 45,000 INJ tokens flowed from the exchanges into whale wallets, piling up during the dip and successfully converting the $18 level into support.
Source: IntoTheBlock
While this is a bullish sign, a decline in whale stocks could pose a challenge for bulls trying to maintain the $23 level.
In summary, this accumulation signals a potential market bottom, encouraging loss holders to maintain their positions while attracting profit holders via FOMO, which is crucial for establishing the $23 support.
Read Injective [INJ] Price forecast 2024–2025
However, if the whales retreat, major players may lose confidence in a recovery, potentially pushing the INJ back to $18.
That’s why monitoring whale activity is essential for an outbreak. If whales remain committed for the long term, their confidence could help the bulls hold the support at $23, paving the way for the next resistance at $30.
