Will the Injective Token Price Rally Trigger a Short Squeeze?
Injective’s recent community vote reduced INJ’s supply, triggering an increase in the altcoin’s value. At press time, its price was $26.29, having surged 33% in the past week.
Despite this rally, INJ futures Traders made short bets on its price. However, these short traders could face a potential short squeeze as the coin prepares to extend its gains.
Injective’s transformation boosts market interest
On January 5, a governance proposal was Single shot 2.0 Injection 3.0 Yes officially recognized99.99% of community members vote Agree. The upgrade will reduce the supply of INJ tokens, making it “one of the most deflationary assets over time.”
The positive hype surrounding this upgrade is currently driving INJ price upwards, with its value rising by 18% in the past two days. Interestingly, despite this, the coin’s futures traders remain unmoved and continue to call for more short positions. This is reflected in INJ’s long-short ratio, which stood at 0.99 at press time.
This ratio compares the number of long positions (bets that prices will rise) to short positions (bets that prices will fall) in the market. When the ratio is below 1, it indicates that there are more short positions than long positions, indicating bearish sentiment among traders.
Growing INJ demand puts short traders at risk
However, As demand for INJ continues to growthese traders face potential short squeeze risks. A short squeeze occurs when the price of a shorted asset rises, forcing short sellers to buy back their positions to limit losses. This buying pressure can push prices higher, creating a feedback loop that accelerates the upward trend.
INJ Rising Relative Strength Index (relative strength index) is worth noting here. At press time, the momentum indicator was in an uptrend at 58.88.
The RSI indicator measures oversold and overbought market conditions for an asset. It ranges from 0 to 100, with values above 70 indicating that the asset is overbought and in need of a correction. On the other hand, values below 30 indicate that the asset is oversold and may be due for a rebound.
INJ’s RSI is 58.88, indicating that the asset is in neutral to slightly bullish territory. Price momentum suggests buying pressure is greater than selling pressure, but it is not overbought yet.
Additionally, readings from INJ’s Moving Average Convergence Divergence (MACD) indicator support this bullish outlook. As of press time, the coin’s MACD line (blue) is above its signal line (orange).
When the indicator sets up in this way, it indicates bullish momentum. This means that if this trend continues, the Injective token price may continue to rise.
INJ Price Forecast: Can Momentum Push Price Above $30?
As buying pressure rises, INJ’s price is OK It broke the resistance formed at $28.72. If the bulls can maintain this momentum, INJ could rally above $30 and revisit multi-month highs at $35.26.
On the other hand, if the short bets win and the Injective token price reverses the current trend, it could plummet to $24.44.
Disclaimer
conform to trust project Guide, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our terms and Conditions, privacy policyand Disclaimer Updated.
