The surge in Injective's trading volume reflects the increase in social activity for the protocol
Spot capital outflow surged, INJ fell to key resistance level
Is Injective's native token INJ about to achieve a major breakthrough? Recent on-chain data has shown some interesting findings that may indicate the token could be on the verge of a significant trend.
With the decline of BTC dominance, the rotation of liquidity in cryptocurrency continues to intensify, and Injective may become the focus of liquidity flow. In fact, investors have been looking for cryptocurrencies and tokens with significant upside potential, especially those that have underperformed recently.
The native token INJ on the Injective protocol recently saw a surge in token trading volume. As of the time of observation, trading volume soared to $741.29 million within the past 24 hours. This is the highest increase in the past 8 months and the second highest increase in 2024.
It is worth noting that Injective's TVL has struggled to achieve significant growth in recent months.
The surge in trading volume indicates that so far this week, there has been a large volume of trades involving the INJ token. However, considering that the Injective network ranks high among the most socially active cryptocurrency projects, this is not surprising.
The surge in Injective's social activity indicates that the network and its native token gained popularity and visibility this week. However, does this necessarily translate into bullish momentum?
INJ retests notable resistance level
The surge in trading volume may be related to its recent bullish momentum.
In fact, INJ surged 14.35% during Tuesday's trading session. This price increase pushed it back to the previous support and resistance area, around the price range of $31.
Will INJ's price break through the resistance level? As of press time, the stock has retraced 6.07% to $28.89.
Well, the bearish outcome seems to align with the negative INJ spot flow observed in the past few days - indicating that investors have been taking profits.
The surge in spot outflows confirms short-term profit-taking, undermining hopes for a significant breakthrough. Even at recent highs, Injective can still be considered undervalued. It is worth noting that the open contracts in its derivatives sector remain low, which may explain why it struggles to break through recent resistance levels.
Injective's open contracts peaked at $176.32 million in the past 24 hours. This is significantly lower than the peak of $308.25 million on March 13.
The lack of a strong recovery in TVL may suggest that despite the surge in trading volume, investors are not that optimistic.
