INJ's returning users have hit a record high, with the majority of them dumping their holdings.
Some investor groups still consider INJ a worthy investment and continue to accumulate assets.
Injective [INJ] has dropped a whopping 12% in the last 24 hours—one of the biggest drops in the cryptocurrency market at the time of writing.
These drops, largely due to the return of long-term investors, do not necessarily signal the end of INJ. On-chain analysis shows multiple buy signals that could help maintain or increase the price of this token.
External factors push up sell-off: What is the cause?
Over the past 24 hours, the number of returning users has spiked, reaching its highest level so far this year.
At the time of writing, the number of Returning Users is at 57,700, the highest level in over a year. These investors are often long-term holders or active traders, who tend to re-enter the market after those Presale purchases and often trade heavily.
Their return during a sharp drop in INJ price suggests that high-confident holders may be dumping their holdings.
Source: Artemis
Meanwhile, new user activity dropped significantly, with just 512 new investors entering the market.
This shows that while long-term holders are exiting, new potential investors are less interested in INJ due to high risk assessment and are cautious about the recovery potential of this Token.
INJ price drop creates buying opportunity for investors
Investors in and outside of DeFi saw the dip as an opportunity to accumulate. In total, they collected about $1.36 million worth of INJ.
DeFi investors alone bought $520,000 worth of INJ and put it into liquidity pools to optimize profits through earning farming and liquidity mining.
Source: DeFiLlama
In just 24 hours, INJ's total value locked (TVL) jumped from $33.9 million to $34.42 million, indicating that capital is gradually flowing into staking platforms and liquidity pools.
In the decentralized segment, hoarding activity is also strong. According to spot netflow data, about $840,000 worth of INJ has been withdrawn from centralized exchanges to personal wallets, increasing investors' long-term holding capacity.
Source: CoinGlass
These developments suggest a clear long-term accumulation trend is forming. DeFi investors are locking assets in staking protocols, while spot traders are moving tokens from exchanges to personal wallets, increasing the likelihood of holding positions for the long term.
INJ's Medium Term Outlook
With both bearish and bullish signals appearing, TinTucBitcoin's liquidity Heatmap analysis suggests that INJ is likely to make a strong move soon.
This database, which tracks expected liquidity levels, suggests that INJ could soon move towards the resistance zone around $11.
Source: CoinGlass
In fact, the highest liquidity is concentrated around the $10.1 mark, as shown by the yellow Supertrend line. If INJ follows history, there is a high chance that the token will rally to this area, despite the return of selling pressure from long-term holders.
Source: https://tintucbitcoin.com/should-you-buy-injective-after-the-price-reduction/
Thank you for reading this article!
Please Like, Comment and Follow TinTucBitcoin to stay updated with the latest news about the cryptocurrency market and not miss any important information!
