Posted:
- INJ’s momentum had historically stalled at the 127% extension.
- The huge gains holders were sitting on could cause wild price swings in the coming days.
injective [INJ] is up 500% since October 12. Technical analysis of the token showed clear weather above $25, and at this point $55 was a big opportunity.
Still, holders of lower prices would certainly add to the selling pressure on INJ.
AMBCrypto’s technical analysis outlined some levels at which holders could make profits. A re-entry could wait until the trend stalls and a significant pullback occurs. On-chain metrics also pointed to overbought market conditions.
If history were to repeat itself…
Source: INJ/USDT on TradingView
Based on October’s rally from $7.16 to $19.14, a series of Fibonacci retracement and extension levels (yellow) were plotted. The $15 and $25 levels had served as strong resistance in 2021, but that was not the case in 2023.
INJ consolidated between $15-18 for almost a month before rising higher again. During their advance, the 100% and 127% extension levels acted as resistance. It was followed by another rapid step to the 200% level.
The RSI on the daily chart stood at 88, deep in overbought territory.
However, it does not prescribe that a withdrawal must take place. We can expect multiple tests of the $46.35 level in the coming days, a small retracement towards $40, and then another rise if last month’s trading repeats.
Yet trading is rarely that simple.
The MVRV ratio was again above November highs
Source: Santiment
As prices continued to climb higher and higher, the age-consumed metric remained stagnant. This suggested that INJ tokens were not moving in large numbers, a signal that usually precedes a massive sell-off. However, the MVRV was extremely high.
Realistic or not, here is INJ’s market cap in BTC terms
Rational holders will most likely sell their tokens to make a profit, which could seriously hurt the bulls’ profits. The average coin age, which trended upward from November 24 to December 10, saw the trend halted since then.
Overall, it made sense for INJ holders to sell and wait for a range formation before accumulating again.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.