Injective’s native token, INJ, has experienced a significant decline of 18.77% over the past five days. Some investors are contemplating buying the dip, but on-chain data indicates that INJ might face further losses depending on market conditions. The Market Value to Realized Value (MVRV) ratio, a critical metric for assessing investor sentiment, currently sits at 15.35%. This low ratio suggests that investors may be less inclined to sell at this time.
Analyzing MVRV Indicator
The MVRV ratio is vital for understanding investor behavior. As of now, the 30-day MVRV ratio for INJ stands at 15.35%, indicating low profitability for investors. This is somewhat higher than the ratio on July 23, implying a reduction in unrealized losses for some.
Despite a strong year-to-date performance, some investors might be exiting the cryptocurrency, potentially triggering a sell-off. This could exert additional downward pressure on INJ’s price, as reflected in the on-chain market depth metrics from 20 exchanges.
Will INJ See a Rebound?
Currently, INJ is 54.25% below its all-time high. The daily chart shows a descending channel between June 13 and July, which is typically bearish. However, INJ broke this pattern, peaking at $28.12 before the RSI value started to drop again.
If INJ’s price declines, the critical support level to watch is $20.22. A failure to maintain this could see INJ falling to $18.19. Conversely, a potential rise in Bitcoin‘s price might boost INJ, given their strong correlation.
Key Takeaways for Investors
- The 30-day MVRV ratio suggests low profitability, impacting selling decisions.
- Market depth analysis indicates potential for further price declines.
- Critical support levels are $20.22 and $18.19.
- A rise in Bitcoin could positively influence INJ’s price.
In conclusion, while INJ shows signs of potential future declines, key indicators and market conditions will play a crucial role in determining its trajectory. Investors should closely monitor critical support levels and Bitcoin’s performance for any signs of a rebound.
