Key Takeaways
The price action of Injective (INJ) presents a complex yet intriguing market structure, as depicted across the daily and hourly timeframes.
The daily chart highlights significant price movement within a broader corrective structure, while the hourly chart focuses on an emerging wave sequence that could dictate the next direction.
Applying Elliott Wave theory, Fibonacci retracements/extensions, and RSI momentum, this analysis breaks down potential scenarios.
The higher timeframe chart (daily) showcases a descending wedge breakout that has transitioned into consolidation. INJ tested the $33.44 level (0.5 Fibonacci) before retracing below 0.236 Fibonacci retracement to a low of $19 on Dec. 20.
This retracement aligns with a broader corrective pattern but was a higher low, landing on the ascending support.
The Elliott Wave count suggests the conclusion of a five-wave impulse in March 2024 to an all-time high of $53, followed by a prolonged correction to a low of $13.70 in August.
The ascending support formed a key pivot point, maintaining the price within a larger upward trend structure.
The Relative Strength Index (RSI) in this timeframe remains neutral, indicating a balance between buying and selling pressure.
From a broader perspective, the $28.76 (0.382 Fibonacci) and $33.44 (0.5 Fibonacci) resistances are pivotal in determining whether INJ can sustain its recovery. A failure to reclaim these levels could lead to a revisit of $20.13 (0.382 Fibonacci retracement of the larger move) or even $16.21 (0.618 retracement).
Zooming into the hourly chart, the price action is developing a recovery with two outcomes ahead.
Either a new impulsive Elliott Wave sequence started on Jan 13 at a low of $18, with the first wave (i) completed near $23.48.
The anticipated retracement to $20.30 will provide further insight into these possible outlooks.
If the Wave (ii) correction holds, the next upward move in Wave (iii) could target $28.76 (0.382 Fibonacci of the larger daily chart), $33.44 (0.5 Fibonacci), and beyond.
The Fibonacci extension projects Wave (iii) potentially reaching $34.00–$38.11, based on a 1.618 extension of Wave (i).
However, failure to maintain support above $20.13 could invalidate the bullish scenario, paving the way for deeper corrections, targeting $18.17 (0.5 retracement) or $16.21 (0.618 retracement).
RSI momentum in this timeframe suggests mild bearish divergence, signaling a potential retest of lower levels before a breakout attempt.