After holding the $4.5 support level, Injective showed strong bullish momentum. The altcoin rebounded to $5.4 before recovering slightly.
At the time of writing, Injective (INJ) was trading at $5.01, up 8% on the daily charts. During the same period, the altcoin’s trading volume soared 113% to $169 million, indicating strong market activity.
Injective rebounds on increased speculation
Injective Securities (INJ) have largely rebounded, largely due to increased speculative demand. According to CoinGlass data, the altcoin’s Open Interest (OI) increased 17% to $103 million, while derivatives volume jumped 168% to $468 million.
Typically, when OI and volume increase together, it indicates increased participation, with traders opening new positions. These positions can be short or long.
Meanwhile, the Long/Short ratio rose above 1 on Binance and OKX, with the Binance Top Traders ratio reaching 1.6. This suggests that traders on these exchanges have primarily taken long positions.
However, the overall ratio remains extremely low at around 0.6, suggesting that with the exception of OKX and Binance, traders in other countries are shorting the market.
The market remains facing intense downward pressure
Even as speculative activity returned to the market, sellers remained extremely active in the spot and futures markets.
On the futures side, outflows have dominated the market for seven straight days. On May 19, futures outflows reached $124.9 million while inflows fell to $121.4 million.
As a result, net futures flow fell to -$3.4 million, a clear sign of aggressive selling activity. On the spot side, sellers rushed to cash out after the INJ bounced.
Data from CoinGlass showed that Spot Netflow reached $903,000, confirming intense profit-taking activity. With sellers being dominant on both sides, this suggests a lack of long-term conviction on the part of market participants.
Often, such intense selling pressure preceded a weakening of the market structure, causing prices to decline.
What momentum indicators suggest
The injection dynamic remains strong despite increased profit taking. The Directional Movement Index (DMI) altcoin’s ADX rose to 57, while the positive index stands at 45.
ADX above 50 indicates a very strong trend, and with a positive index above the negative index, it suggests a strong rise.
Additionally, the RSI EMA dispersion indicator showed the RSI at 69 and the signal line at 66. With Upper BB well above these levels, this suggests that the trend remains bullish.
However, the market direction begins to soften after prolonged expansion. These momentum indicators signal two things: a sideways move or a lighter pullback.
Therefore, if profit-taking persists, Injective will likely drop again to $4.5. However, as capital continues to flow into futures, if demand maintains, INJ will hold $5 and target a reversal of the $5.5 resistance.
By doing so, the altcoin will be strong enough to target $6.
Final summary
- INJ managed to hold the $4.5 support and then rebounded to $5.4 before falling back to $5.
- The stock has rebounded, largely on increased speculation, but the threat from sellers remains strong, posing the risk of further slippage.
