Why INJ traders should watch THESE levels after price rally hits major roadblock

Injective [INJ] has been exhibiting key signs of strength across the market, with investors increasingly accumulating the asset. Especially in the perpetual market.

At the time of writing, the perpetual market long-to-short ratio, an indicator for tracking whether traders’ INJ volume is net long or short, showed the presence of bulls.

The ratio had a reading of 1.019, which translated to about 50.76% of INJ’s total perpetual market volume. This suggested that there may be only a slight edge for long traders in the market.

Here, it’s worth noting that the volume controlled by long traders has been steadily declining, and this did not start today. In fact, data revealed that the ratio hit a high of 1.037 before falling consistently, thanks to growing selling pressure.

At the time of writing, INJ was up 14% in the last 24 hours. However, the downtick in long volume, particularly at this scale, raises questions about whether the asset could soon begin to drop. This could cause it to underperform as it did over the last 30 days when it plummeted by 8.91%.

Big exchanges are selling

The top three exchanges controlling the most INJ volume suggested that sellers have gradually been dominating the perpetual market.

According to CoinGlass’s volume tracker, Binance, LBank, and Bybit control more than half of the total volume, with $97.41 million collectively dominated by sellers. Sell volume crossed 51% on each of these exchanges too. 

When sell volume in the perpetual market keeps growing, it simply implies that traders may be leaning towards a short position on the asset. It must be added though that the sentiment in INJ’s perpetual market is not reflective of the broader market. The bullish momentum has been solid across the latter so far. 

In fact, the volume-price analysis revealed that the volume was up 85% at press time, reaching $100.86 million. Historically, a hike in volume alongside the price is a sign that a rally is likely to continue as investors remain largely bullish.

Perpetual market at a crossroads

The perpetual market remains at a crossroads over the potential direction of INJ’s price. Especially as the Open Interest (OI)-weighted funding rate remained nearly flat.

The OI-weighted funding rate shows the position of capital in the perpetual market and whether traders are more heavily positioned in long or short positions.

At the time of writing, the OI-weighted funding rate had hit 0.0003%, slightly tilted in favor of the bulls.

However, this does not confirm a strong market direction. Instead, it may be evidence of indecision and could imply that INJ might flip in either direction. Hence, it is important for traders to take a cautious position.

Final Summary

• INJ gained by 14% in 24 hours, but a fall in long volume and growing sell pressure may be signs of caution. 
• The OI-weighted funding rate has been nearly flat, leaving INJ at a crossroads.