Injective [INJ] has extended its bearish push after an aggressive rejection at the flag resistance a few days ago. At press time, the token was trading below its 20-day exponential moving average at $7.779 after hours of intense selling.
Concurrently, Injective’s Open Interest took a sharp drop over the last 24 hours as the network’s supply in profit flattened. Now, can network bulls force a reversal?
INJ faces another rejection at the 20-day EMA
INJ’s rejection at flag resistance weakened its recovery attempt, while the latest barrier at the 20-day EMA adds another challenge for buyers. Failure to reclaim this moving average could keep the short-term trend tilted to the bears.
The last line of defense lies around the demand zone around $7. If selling pressure persists, sellers could push the token price action towards the demand zone, where buyers could attempt to halt the decline.
However, a sustained move back above the 20-day EMA would weaken the bearish setup and give the buyers a chance to regain control.
Injective OI falls as profitability flattens
Meanwhile, Injective’s Open Interest dropped sharply to $79 million, indicating a reduction in outstanding derivative positions. This suggests that traders are closing positions or reducing leverage as uncertainty grows across altcoins.
It is worth noting that the decline does not necessarily confirm that sellers are gaining control, since falling Open Interest can accompany both long and short position closures.
Additionally, supply in profit has flattened around $75 million after months of aggressive pumping. This indicates little recent change in the reported value of profitable supply, rather than a clear increase in holders’ unrealized gains.
Can sellers push INJ toward $7?
If the developments persist, a further bearish continuation to the demand zone could be close to certainty, particularly given that INJ is still trading below its 20-day EMA.
As it stands, both technicals and on-chain indicators are sparking bearish signals. Most aversive investors and traders are targeting the demand zone as a strategic point for further accumulations.
Final Summary
- Injective faced renewed selling pressure after rejection at flag resistance and the 20-day EMA, putting the $7 demand zone in focus.
- The network’s Open Interest dropped sharply, while supply in profit flattened near $75 million.
