Injective’s native token INJ, a layer-1 blockchain enabling transactions across different chains, has dropped by 18.77% over the past five days. In such situations, some investors may seek to capitalize on opportunities and buy at the dip. However, on-chain data reveals that this may not be the case, as some indicators suggest INJ could face further declines depending on market conditions.
Injective Comments
Analyzing investor behavior and opinions about a cryptocurrency can be insightful by examining the Market Value to Realized Value (MVRV) ratio. The MVRV indicator is crucial for investors to gauge future perspectives.
Looking at the above indicator, the 30-day MVRV ratio for Injective is at 15.35%. This low ratio indicates that INJ investors have low profitability and may not want to sell at the moment.
However, the ratio being higher than it was on July 23 suggests that the unrealized loss rate has decreased for some investors.
Considering the incredible year-to-date (YTD) performance of INJ, some investors might be seen abandoning the cryptocurrency, potentially leading to a selling phase.
In such a scenario, INJ’s price could face another downward pressure. Additionally, the exchange on-chain market depth also seems to reflect this situation. This metric shows the conditions in the order books of 20 exchanges.
When analyzing INJ, it is thought that 738,620 tokens could be sold at the price of $23.99 as reflected in the charts. On the other hand, the values on the buying side appear lower. Consequently, opinions suggesting that INJ prices could fall further continue to emerge.
Will Injective (INJ) Rise?
As of the time of writing, INJ is 54.25% away from its all-time high (ATH). The daily chart analysis shows that INJ moved within a descending channel between June 13 and July. It is also worth noting that this formation is bearish.
However, INJ broke this formation after the price movement to $28.12 (dotted lines). The RSI value started to decline again after the subsequent rise.
In the event of a possible decline, the critical support level for INJ is considered to be $20.22. If the bulls fail to maintain this level, the price could drop to $18.19. On the other hand, a potential rise in Bitcoin (BTC) could also lead to an increase in INJ.
It is known that there is a strong correlation between BTC and INJ. In a scenario where BTC’s price rises, INJ could follow, reflecting a scenario where the price reaches $27.49.
