Injective Protocol (INJ) Bull Flag Formation Signals Potential Breakout Ahead
INJ price made a bull flag increasing by 16% from its recent low. A breakout above the descending resistance appears immanent.
Key Takeaways
- INJ forms a potential bull flag, signaling continuation.
- Two key indicators suggest a possible new uptrend.
- Breakout above descending resistance could confirm bullish momentum.
The Injective (INJ) price recovered nearly 17% from yesterday’s low of just above $15 to a high of $17.60. Since then, momentum has stalled, and the price has formed a descending flat triangle.
Considering the price context, this triangle could be interpreted as a bull flag, indicating that more upside continuation could be expected.
Injective Price Analysis
On March 14, INJ reached an all-time high of nearly $54, completing a five-wave impulse that began in January 2023. A sharp decline followed, forming a descending triangle pattern.
The wave structure within this triangle can be interpreted as an ABCDE correction, reaching a low of $13.60 on August 5. The RSI on the daily chart dropped to the oversold zone at 26%, while the MACD formed a golden cross on August 13, indicating the potential start of a new uptrend.
Since its recent low, INJ has started a new uptrend, leading to a local high of $23, increasing by 66% and attempting to break out above the descending resistance. But the attempt was a fakeout, leading to an immediate downturn to a low of $15.20 on Sept. 2.
This is a higher low than Aug. 5, which suggests that INJ entered a bullish stage. However, what will happen next as it struggles to surpass the descending resistance?
INJ Price Prediction: Will a Breakout Trigger a Major Uptrend?
Zooming into the hourly chart, we can see that INJ advanced five waves from its Aug. 5 low to its $23 high. Its subsequent decline led to the 0.786 Fibonacci level, where we saw a bounce. The following recovery has brought the price back for an interaction with the descending resistance below which a bull flag formed.
These patterns usually indicate trend continuation and, considering the context – seeing a five-wave uptrend followed by a higher low retracement, a breakout above is highly likely.
Should we see a breakout, INJ will provide a significant bullish signal as the descending resistance is anchored at an all-time high. However, we saw a similar situation with the previous high, and the price reverted significantly.
This is why, to be sure, not only does INJ have to cross this level, but it also needs to stay above it on its next retracement. If this happens, the price could commence a substance uptrend in the following months.
Alternatively, if it gets rejected again or makes another fakeout, INJ could face lower values than on Aug. 5.
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