Injective crypto rallies 10% after Gulf Labs partnership – Can INJ break out?

Injective [INJ] has extended its bullish advances for the fifth day since it bounced off from the 50-day EMA support at around $6.05. At the time of writing, INJ prices had gained by about 10%.

The most recent catalyst is a newly announced partnership with Gulf Labs. According to the announcement, Gulf Labs has joined Injective as an institutional validator, strengthening its role in network security and governance.

Moreover, the partnership is also set to  open avenues for exploring tokenization, stablecoins, and institutional on-chain finance. At the same time, INJ’s trading volume has spiked significantly over the same period, indicating increased market participation.

With price approaching a potential breakout from a flag pattern, can buyers sustain the rally? 

Positive derivatives back INJ’s recovery

According to AMBCrypto’s latest analysis, INJ’s trading volume has booked a whopping  25% increase to $153.37 million. The gains suggest stronger market participation among the network traders.

Concurrently, the network’s total Open Interest has spiked sharply to $72.45 million over the past 24 hours as of writing. This points to an increased leveraged position across the network.

That is not all; the number of active addresses has been recording a steady increase over the past six days.

With Injective’s derivative data now aligning to the market bias, the magnitude of the buying pressure required to initiate a breakout from the long-lasting channel consolidation could be met in the short run.

Can INJ break out of its flag pattern?

While the INJ daily price is still confined inside a channel consolidation structure despite the previous gains, the new developing momentum in combination with the recent on-chain support may help to break out of the existing consolidation structure.

A breakthrough above the upper boundary of the pattern and sustained volume will help to create a more robust bullish technical structure. On the contrary, failure at the upper boundary of the pattern may lead to further consolidation despite the positive institutional development in the crypto market.

All in all, the market sentiment remains bullish, although a confirmed flag breakout with sustained buying momentum may be considered more reliable evidence.

• INJ’s flag pattern puts a potential bullish breakout in focus. Sustained buying above resistance could extend the rally, while rejection may prolong consolidation.