Injective Protocol: How an INJ pullback could be next as FOMO sets in

– INJ may have hit a local top due to the social volume cluster and network growth divergence.

– The project’s traction had waned from the initial hike.

As with any volatile asset, Injective Protocol [INJ] might experience corrections after significant price gains. The INJ token, which enables developer incentives, staking, and governance on the network, moved from $1.2 in January to $9.21 at press time. 

Read Injective Protocol’s [INJ] Price Prediction 2023-2024

Not the best of points to consider

But could the current trend still offer a good buying decision? According to Santiment, INJ was at a level where its price was driven by a position where investors might feel a Fear of Missing Out (FOMO).

In crypto, FOMO is defined as a psychological phenomenon where participants have the urge to jump into a rapidly rising market or asset out of potential gains.

Based on the on-chain platform’s analysis released on 17 April, the 30-day active addresses under Injective rose to a Year-To-Date (YTD) high of 3620.

Active addresses show the number of unique interactions that investors have had with a token. This implies that INJ could boast of healthy network activity.

However, a close assessment of the data showed that the bunch of speculation and transaction around the token only arose again on 28 March.

Source: Santiment

The context of falling delight

Likewise, the social volume was able to rise to a six-month high as a result of the price hike on 14 April. But as of this writing, the metric had waned to a value of 42. Such an instance means that the excitement around the token was at its peak. 

However, it could also make a good case for the token to reach a local top. As a matter of fact, the network growth was beginning to feel the impact of the loss of elation.

This was due to the drop in the metric, as shown by on-chain data. A simplification of this position infers that the project has been starved of new addresses. Therefore, it was losing traction, and user adoption could be getting increasingly challenging.

Source: Santiment

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At press time, INJ was in a mangled condition. In the interim, addresses in the retail layer have kept on with the buying spree. Meanwhile, whales, as reported earlier, were engaged in distributing supply and selling.

Source: Santiment

For what it’s worth, INJ has been able to gain 6.41% in the last 24 hours. The volume also increased by 28%. However, its price still remains on the brink of correction.