Injective faces further downside risk as futures open interest shrinks

Key Takeaways

• Injective (INJ) is trading near $7.42 on Thursday, building on losses from a 5.7% decline the day before.
• The futures taker buy-to-sell ratio sits at 0.96, with sell orders making up 51.1% of taker activity, pointing to a minor edge for sellers.
• A drop below the $7.19 trendline support could push INJ lower toward $6.71 and $6.27, whereas a move above $8.35 might pave the way to $9.41.

Injective (INJ) stayed under pressure on Thursday, changing hands below $7.50 as falling derivatives activity and renewed selling hampered its short-term recovery outlook.

The digital asset was trading at roughly $7.42 after shedding about 6% during Wednesday's session, with traders showing little confidence in a sustained bounce.

Data from CoinGlass points to a steady drop in futures open interest since mid-October, while sell orders in the market continue to outpace aggressive buying.

Injective futures OI declines as traders scale back exposure

Participation in Injective's derivatives market has weakened considerably in recent weeks.

According to CoinGlass, INJ futures open interest has fallen 4% over the past 24 hours and now amounts to $140.77 million.

A prolonged decline typically signals that traders are unwinding their positions, which may reflect weaker speculative interest or uncertainty about where the market is headed.

CoinGlass figures indicate that sellers still hold a slight edge in Injective's futures market.

The INJ taker buy-to-sell ratio is at 0.96, meaning aggressive sell orders outnumber aggressive buy orders.

A reading below 1 generally implies that traders executing market orders are more inclined to sell into existing bids than to buy from available offers.

Injective technical outlook: INJ tests key $7.19 trendline support

Injective's daily chart shows a mixed technical picture, with the token trading between a notable moving average and a rising support trendline.

At the time of writing on Thursday, INJ was around $7.42, just under its 50-day exponential moving average near $7.55.

The failure to reclaim that moving average suggests buyers have not yet regained command of the short-term trend.

Still, Injective continues to hold above an ascending support trendline near $7.19. The 200-day EMA, located around $6.27, also remains beneath the current price.

Staying above this longer-term moving average indicates that the broader technical picture has not deteriorated as sharply as recent price moves might suggest.

Nonetheless, momentum indicators are starting to soften. The moving average convergence divergence (MACD) has slipped below its signal line, signaling that bullish momentum is waning.

Meanwhile, the relative strength index (RSI) is at about 44, slightly under the neutral level of 50.

That points to sellers gaining influence, though the market has not yet entered oversold territory.

The rising trendline near $7.19 marks Injective's first key downside support.

A sustained break below that level would undercut the current technical structure and indicate sellers are taking firmer control.

Should INJ decisively breach the trendline, the next major support lies at $6.71. Failing to hold $6.71 would expose Injective to another important support zone around $6.27.

Despite the recent weakness, Injective could mount another recovery if buyers successfully defend the $7.19 support trendline.

The first hurdle is the 50-day EMA around $7.55. A sustained recovery above that level would suggest buying momentum is strengthening and could encourage traders to aim for higher resistance.

The next major barrier sits at $8.35, a horizontal resistance level that capped Injective's gains in the prior week.

A decisive daily close above $8.35 would bolster the bullish view and could open the path for a recovery toward $9.41.