Injective (INJ) Price Prediction: Can Momentum Push the Price Above $30?

Injective's recent community vote to reduce INJ's supply has sparked a rally in the altcoin's value. Trading at $26.29 at press time, its price has surged 33%

Injective (INJ) has enjoyed a recent rally, trading at $26.29 at press time. This marks a 33% price increase over the past week. However, futures traders have placed short bets against INJ, setting the stage for a potential short squeeze as the token price continues to rise.

This development comes as Injective is set to transition from version 2.0 to 3.0, following a governance proposal that passed with 99.99% approval. This upgrade will reduce the supply of INJ tokens, making it “one of the most deflationary assets over time.”

The hype surrounding this upgrade is largely contributing to the INJ price rally, with a 18% price increase over the past two days. Notably, despite this rally, INJ futures traders appear unimpressed and have maintained a demand for short positions.

This trend is evident in INJ's Long/Short Ratio, which stands at 0.99 at press time. This ratio compares the number of long positions (bets that the price will rise) to short positions (bets that the price will fall) in a market. When the ratio is below 1, it indicates that there are more short positions than long positions, suggesting a bearish sentiment among traders.

However, with increasing demand for INJ, these traders might face a potential short squeeze. A short squeeze occurs when a shorted asset experiences a price increase, compelling short sellers to buy back their positions to minimize losses. This buying pressure can drive the price even higher, creating a feedback loop that accelerates the upward trend.

INJ's rising Relative Strength Index (RSI) is also worth considering. At press time, this momentum indicator is in an uptrend at 58.88.

The RSI indicator measures an asset’s oversold and overbought market conditions. It ranges between 0 and 100, with values above 70 indicating that the asset is overbought and due for a correction. On the other hand, values under 30 indicate that the asset is oversold and may witness a rebound.

At 58.88, INJ's RSI indicates that the asset is in a neutral to slightly bullish zone. The price momentum shows more buying than selling pressure but is not yet overbought.

Moreover, readings from INJ's Moving Average Convergence Divergence (MACD) indicator support this bullish outlook. At press time, the token's MACD line (blue) is positioned above its signal line (orange).

When this indicator is set up this way, it indicates bullish momentum. This means that if the trend persists, the Injective token price may continue to rise.

INJ Price Prediction: Can Momentum Push the Price Above $30?

As buying pressure builds up, INJ's price could breach the resistance encountered at $28.72. If the bulls can sustain this momentum, INJ could rally back above $30 and approach its multi-month high of $35.26.

On the other hand, if the short bets prevail and the Injective token price reverses its current trend, it could plummet to $24.44.