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Injective (INJ) price is currently trading in a downtrend, stuck in the lower range of the market. Despite the network’s deflationary efforts to boost prices, the downward trend continues. Combined with broader market gloom, the bad days for the INJ token may not be over yet. So, what levels should investors carefully watch at this point?
Weakness Continues in INJ Price
Despite the recent burning of 10,000 INJ tokens, the Injective price continues to show weakness. Token burning is a deflationary intervention where a certain amount of cryptocurrency is permanently removed from circulation. This can have various effects and benefits for a project and token holders.
Reducing the total token supply through burning increases the scarcity of the remaining tokens, which could potentially lead to an increase in token demand, thereby raising the token value.
However, the effect of token burning on the Injective price seems delayed as the token price is currently at $26.
Bulls Target This Level
For INJ, the Relative Strength Index (RSI) has not yet crossed above the 50 average level and is recording lower highs, indicating a stagnant trend. This suggests a potential for further decline in the INJ price. Similarly, the MACD metric remains in the negative zone, supporting the downtrend. These indicators point to the possibility of the price continuing its downward trend.
However, despite the presence of bulls defending the current position, increases in the volume profile strengthen the likelihood of further price declines. On the other hand, in a reverse scenario, if the INJ price gains upward momentum and rises above the $31.18 level, which is the 61.8% Fibonacci retracement level, more buy orders could come in. Additionally, a daily chart closure above the 50% Fibonacci Golden level of $35.23 could invalidate the bearish thesis.
Critical Resistances
However, to reach these levels, bulls need to overcome the resistance of the 21 and 50-day Smooth Moving Averages (SMMA), which are evident at $31.80 and $33.08 levels.
The volume profile indicates expected trading activity increases when prices reach these levels. This situation signals increased buyer interest and could potentially raise prices. Therefore, an increase in volume along with a price rise is considered a confirmation of an upward trend.
Finally, if buyer momentum overcomes selling pressure, the INJ price could surpass the 38.2% Fibonacci retracement level of $39.28. This scenario could offer a chance for INJ to regain its highest levels of $53.00.
