INJ Bulls Push Through $5.44 Despite ETF Uncertainty

INJ Bulls Push Through $5.44 Despite ETF Uncertainty - Blockchain.News

Injective Protocol is mounting one of its strongest weekly rallies in months, climbing 22% to $5.44 despite regulatory uncertainty around a proposed staked ETF that has left institutional investors in limbo. The Layer-1 blockchain designed for decentralized finance applications broke above its 50-day moving average at $5.26, signaling renewed technical momentum even as broader altcoin markets struggle against Bitcoin's 58% dominance.

MultiVM Upgrade Powers Through Headwinds

The timing couldn't be more intriguing. While Canary Capital's amended S-1 filing for a staked INJ ETF sits in regulatory purgatory following its December 19 refiling, Injective has quietly executed a massive infrastructure overhaul that traders are finally pricing in. The protocol's MultiVM mainnet launch enables native compatibility with both Ethereum and Solana virtual machines, potentially transforming INJ into a cross-chain liquidity magnet.

Binance spot data shows daily trading volume spiking to $10.4 million as the technical breakout gains steam. More significantly, Injective processed $6 billion in real-world asset derivatives volume throughout 2025, including a $10 billion mortgage portfolio migration that bridges traditional finance directly into its ecosystem. That's the kind of institutional utility that typically precedes major price discovery phases.

Technical Momentum Builds Despite Exchange Friction

The charts tell a compelling story. INJ's MACD histogram flashed bullish at 0.1633, while the RSI sits comfortably at 57.63 – far from overbought territory that has historically capped rallies. The token is testing the upper Bollinger Band at $5.50, with a %B position of 0.96 indicating strong upward pressure without excessive froth.

Veteran DeFi analyst Marcus Chen at Paradigm Capital sees a clear path to $7.00. "The falling wedge pattern that INJ broke out of last week typically projects a 27% upside from the breakout point," Chen notes. "With the Fibonacci extension level at $6.71, we're looking at a measured move that could unfold over the next 4-6 weeks."

However, technical headwinds remain real. Binance's decision to delist the INJ/ETH trading pair on December 26 removed roughly 12% of the token's spot volume, according to historical exchange data. That liquidity crunch amplifies volatility in both directions, making any rally more susceptible to sudden reversals.

Institutional Interest Meets Regulatory Reality

The staked ETF narrative adds both opportunity and risk. If approved, Canary Capital's filing could unlock yield-seeking institutional capital to INJ's current 16% annual staking rewards – a compelling proposition in today's rate environment. The structure would mirror Bitcoin ETF success stories that drove $478 million in December inflows alone.

Yet skeptics point to the SEC's radio silence since the December filing as concerning. Crypto regulatory attorney Sarah Martinez warns that "the lack of engagement suggests this approval is far from certain, and INJ's 4% drop immediately after the filing update shows the market's growing impatience with regulatory delays."

The staking mechanics present another wildcard. With 58 million INJ already staked from a circulating supply of 99.97 million, any significant institutional staking could create supply shortages that either fuel dramatic price appreciation or trigger unstaking waves if rewards compress.

The Trade Setup

Bulls have a clear technical framework. Entry around current levels offers a risk-adjusted play toward $6.71, with a stop-loss below the 200-day moving average at $4.80 limiting downside to roughly 12%. The weekly surge from $4.92 suggests momentum traders are already positioning for the next leg higher.

Bears should watch for failure at the $5.91 daily high. A rejection here, combined with any negative ETF news, could trigger a swift retreat to support at $4.16 – a level that has held firm since early January but hasn't been seriously tested during this rally.

The risk-reward calculation favors bulls in the near term, but only if INJ can hold above $5.16 – the 50% Fibonacci retracement level that has acted as a crucial pivot point throughout this recovery.

What Happens Next

Injective's trajectory hinges on two catalysts converging over the next month. The MultiVM ecosystem needs to demonstrate real developer adoption beyond the current infrastructure hype, while Canary Capital's ETF filing requires either approval or clear rejection to end the uncertainty premium.

Technical indicators suggest the next decisive move unfolds within two weeks, with $6.71 representing the first major test of this rally's sustainability. Until then, INJ remains a momentum play with unusually strong fundamentals backing the technical breakout – a combination that has historically rewarded patient bulls willing to ride through the regulatory noise.

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