INJ Bounces 13% From Support, But Smart Money Keeps Shorting — Can Injective Hit $7?

Injective's native token INJ staged a notable comeback, surging 13.68% within a single 24-hour window after bulls stepped in to defend a critical support zone near $4.19. The price climbed back to approximately $4.89, pushing the project's total market capitalization to $489.67 million. Trading volume during the same period reached $145.85 million, reflecting a marginal 1.16% dip — yet the bounce was strong enough to prompt traders to take a second look at the broader downtrend that had been weighing on the asset.

Despite the double-digit price recovery, institutional and experienced traders on Binance showed little enthusiasm for flipping bullish. Data revealed that short accounts made up 58.91% of all positions, compared to just 41.09% held by longs — translating into a Long/Short Ratio of 0.70. This persistent bearish skew among top-tier participants suggested widespread skepticism about the rally's staying power.

That said, heavy short positioning carries its own risks. Should the price continue climbing and break through nearby resistance levels, traders holding short positions could be forced to cover, triggering a short squeeze and amplifying upside momentum. For now, however, leveraged market participants appear to be betting on fading strength rather than chasing the rally.

Derivatives data painted an equally ambiguous picture. The Futures Volume Bubble Map entered what analysts describe as an overheating phase, indicating that trading activity picked up sharply as INJ bounced from support. Elevated volume doesn't necessarily signal a directional bias — it simply reflects growing engagement from both sides of the market. More telling was the Futures Taker CVD, which remained seller-dominant throughout the recovery. This means aggressive sell orders continued to outpace buyer-initiated trades, suggesting the rebound was not fully conviction-driven from a derivatives standpoint. A meaningful continuation to the upside would likely require strong spot market demand to absorb the persistent selling pressure.

From a technical perspective, INJ's daily chart showed a clear shift in short-term momentum after the $4.19 support held firm. However, the token still trades well below previous swing highs at $5.68 and $7.00, leaving significant overhead resistance intact. The Relative Strength Index recovered to 46.67 — up from levels that had been approaching oversold territory — while the RSI moving average sat near 44.92. Both readings suggest bearish pressure has eased without fully transitioning into bullish territory.

The immediate target for bulls is a clean reclaim of the $5.00 psychological level. If that barrier falls and buying interest is sustained, the next logical resistance area sits around $5.68. A successful break there would open the door for a potential push toward the $7.00 zone. Conversely, if buyers fail to hold above $5.00, the market may revisit the $4.19 support before any more ambitious recovery attempt can develop.

In summary, Injective has demonstrated resilience by bouncing firmly off key support, but the broader picture remains cautious. Professional traders continue to lean short, derivatives flow remains seller-driven, and critical resistance levels have yet to be challenged. The path to $7 exists — but it runs directly through several technical and sentiment barriers that bulls have not yet cleared.