Injective (INJ) has experienced a price rally, rising nearly 10% in the past week. However, key on-chain metrics suggest this surge may be driven by speculative buying rather than fundamental growth. The Price-Daily Active Address (DAA) Divergence metric indicates a significant disparity between INJ's price increase and its daily active addresses, with a 154.52% divergence. This suggests that the price rise lacks substantial network activity support, signaling potential overvaluation.
Additionally, the Market Value to Realized Value (MVRV) ratio is at 128.71%, indicating INJ may be overvalued as its market price significantly exceeds the average acquisition price. With the Directional Movement Index (DMI) and Aroon indicators showing bearish signals, there is a high probability of a price correction once speculative buying wanes. If selling pressure continues, INJ could drop to $19.67. Conversely, if actual demand increases, the price could rally toward $22.80.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.