Crypto asset Injective (INJ) experienced a 12% drop in 24 hours, marking one of the most significant losses in the market. Despite this, on-chain analysis highlights compelling buy signals. Investors face a crucial decision: seize this opportunity or exercise patience?
The Injective cryptocurrency (INJ) has experienced a sharp decrease of 19% in the last 24 hours, one of the most significant drops in the cryptocurrency market. However, this decline is not necessarily a sign of the end for INJ. An in-depth analysis of on-chain data highlights several buying signals that could stabilize or even push the price up in the short term.
One of the main reasons for this drop is the massive return of former users to the Injective network. Indeed, the number of “returning” users has reached a yearly high, with close to 58,000 individuals. These users, often long-term holders and active traders, tend to aggressively sell off their assets when re-entering the market.
Conversely, the activity of new users has significantly dropped, with only 512 new participants joining the network. This indicates that potential investors currently view INJ as a high-risk investment and are hesitant to commit.
Despite this selling pressure, some investors have taken the opportunity to accumulate INJ tokens. DeFi investors have purchased $520,000 worth of INJ and deposited them into liquidity pools, boosting the Total Value Locked (TVL) from 33.9 to 34.42 million dollars in 24 hours.
Likewise, in the non-DeFi segments, accumulation has strengthened. Net flow data on centralized exchanges showed a withdrawal of $840,000 in INJ, indicating a transfer to private wallets.
While bearish and bullish signals coexist, analysis of the “Liquidation Heatmap” suggests that the next key resistance level is around $11. Indeed, the highest concentration of liquidity has been spotted just above the current price, which could attract INJ prices towards this level.
However, the highest liquidity level is around $10.1, represented by the yellow Supertrend trend line. If INJ follows its historical pattern, the asset could bounce back to this level despite the current selling pressure.
Ultimately, although INJ’s drop is significant, the increasing accumulation by DeFi and non-DeFi investors indicates a positive long-term outlook for the cryptocurrency. Investors seem to view this decline as an interesting buying opportunity.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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