Injective (INJ) has been rallying following its community-approved supply reduction. The token, now trading at $26.29, has surged 33% in the past week. Despite this bullish momentum, futures traders are placing short bets against INJ, risking a potential short squeeze as demand grows.
On January 5, the Injective community approved the transition to Injective 3.0, with 99.99% of votes in favor. This upgrade will make INJ one of the most deflationary assets over time, sparking investor interest. The token’s value has jumped 18% in two days since the upgrade announcement.
However, futures traders remain cautious. INJ’s Long/Short Ratio currently stands at 0.99, indicating more short positions than long. This bearish sentiment could be risky for short traders as the token’s bullish momentum continues.
Short Traders Face Potential Risks
The growing demand for INJ puts short traders at risk of a short squeeze. If the token’s price rises further, short sellers might be forced to buy back their positions, intensifying upward pressure on the price.
Technical indicators support this bullish outlook. INJ’s Relative Strength Index (RSI) stands at 58.88, signaling neutral to slightly bullish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator shows the MACD line above the signal line, reinforcing positive momentum.
INJ Price Prediction: Can It Break $30?
If buying pressure persists, INJ could break through resistance at $28.72 and push past $30. A sustained rally might even take the token to its multi-month high of $35.26.
However, a bearish reversal could drive the price down to $24.44, especially if short bets dominate.