Injective [INJ] Plummets 73%, Yet a Rebound Could Be on the Horizon

Injective (INJ): Analyzing the Path from Decline to Potential Rebound

Injective (INJ) has found itself in a tumultuous market period following its all-time high (ATH) of $53 in March 2024. Since that peak, the altcoin has experienced a staggering decline of approximately 73%, with its current price hovering near a 15-month low. However, amidst this downturn, recent market patterns suggest that a potential rebound may be on the horizon. Let’s take a closer look at the factors influencing INJ’s price movement and the landscape surrounding its potential recovery.

A Falling Wedge Pattern: A Bullish Signal?

In the previous months, INJ has been entrenched in a downtrend that has mirrored broader trends in the cryptocurrency market. A significant event in this price action was its inability to break the $34 resistance level, which set the stage for the formation of a falling wedge pattern on its daily chart. This pattern is generally perceived as a bullish setup, characterized by a series of price fluctuations confined within two converging trendlines. Such technical formations often signify a market gearing up for a breakout.

Yet, despite the implications of the falling wedge, INJ has slipped below its key exponential moving averages (EMAs)—the 20, 50, and 200-day EMAs—indicating a persistent bearish sentiment. This negativity was compounded by the emergence of a “death cross,” where the 20-day EMA crossed below both the 50-day and 200-day EMAs, marking a continuation of the downtrend.

Recently, on February 3, 2025, INJ attained a 15-month low, but a subsequent series of green candles hinted at potential upward momentum. Nevertheless, the altcoin faced challenges in breaking through the $15.6 resistance level, which aligns with the 20-day EMA. For any bullish reversal to gain traction, INJ must achieve a convincing close above this resistance threshold.

The Potential for a Recovery

Should INJ successfully breach the $15.6 resistance, the focus would shift to the $18–$20 range as the next target for buyers. Establishing a sustained uptrend beyond this area could set the stage for a more significant recovery. However, it is essential to remain vigilant concerning broader market sentiment, given the unpredictable nature of the cryptocurrency landscape.

Analyzing the Relative Strength Index (RSI), we observe that it currently sits below 50. This indicates that buying pressure is insufficient to catalyze a robust bullish movement. For INJ to forge a genuine path toward recovery, the RSI must break above the 50 mark, signaling that buying is beginning to outweigh selling.

The INJ 3.0 Upgrade: A Potential Catalyst for Rebound

A significant development on the horizon is the upcoming INJ 3.0 upgrade, which could serve as a critical trigger for a price resurgence. This upgrade aims to drastically reduce the token’s circulating supply until Q1 2026, fostering a deflationary effect. With a tighter supply expected over time, this could elevate the value of INJ—assuming that demand remains strong, particularly if overall market sentiment shifts favorably.

This deflationary approach is vital for long-term price movement, as a reduced supply can create upward pressure on prices, provided the demand either remains constant or grows concurrently.

Positive Market Signals from Derivatives Data

Recent data surrounding Injective’s derivatives market also suggests an air of optimism regarding a potential price recovery. Notably, derivative volume experienced an 18.63% surge, reaching nearly $199 million, while Open Interest saw a decrease of 7.5%, settling around $105 million. The combination of rising volume with declining Open Interest may indicate that traders are closing positions. This situation could pave the way for new long positions if bullish sentiment re-emerges.

Moreover, the Long/Short Ratio on Binance has shown a significant figure of 2.11, revealing that traders maintain a relatively optimistic outlook regarding INJ’s short-term price movements. Should sentiment continue to trend positively, this ratio could further increase, fuelling upward momentum.

Navigating the Present Landscape

Despite the drastic 73% decline from its ATH, Injective (INJ) is at a pivotal point in its market journey. The falling wedge pattern, along with the upcoming INJ 3.0 upgrade, suggests that, although the landscape appears challenging, a potential rebound is plausible if key resistance levels—particularly the $15.6 threshold—can be overcome and buying pressure becomes more pronounced.

As traders and investors watch the unfolding developments closely, the path for INJ will be largely influenced by broader market conditions, especially the performance of Bitcoin and prevailing sentiments across the cryptocurrency space. The next few weeks could be critical for INJ’s ability to transcend its bearish trend and discover fresh bullish ground.