Injective price fell 10% after $20M worth of token unlocks. Will 3M unleashed tokens send INJ below $6.853?

• Injective price is down 10% since August 21, after the network unleashed 2.86 million tokens worth $20.56 million.
• The tokens were allocated toward ecosystem development, constituting only up to 3.41% of the total circulating supply.
• A decisive daily candlestick close below the $6.853 support level would confirm a downtrend.  

Injective (INJ) price has maintained an overall uptrend, sustaining above an ascending trendline on the daily timeframe. However, this positive outlook is under threat after a recent token unlocks event that added to the asset’s circulating supply.

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Injective price could be due for a crash unless bulls interests’ resurface

Injective (INJ) price remains on an uptrend, pending confirmation, as things could change if INJ records a decisive daily candlestick close below the $6.853 support level. The token was repelled from the $8.257 resistance level following a recent cliff token unlocks event that saw up to 2.86 million tokens unleashed, worth around $20.56 million.

INJ token unlocks countdown

With the anticipation of upcoming token unlocks, investors, developers, and other token holders seize the opportunity to offload their assets. Owing to the speculative nature of the market, the price surges ahead of the unlocks. The ensuing positive momentum potentially initiates an uptrend.

For the case of INJ, the tokens were allocated toward ecosystem development, meaning they stay in the ecosystem and will not be sold immediately for a profit. It would have created increased selling pressure if they had been distributed to project partners, advisors, and/or early investors on a large stake risk.

This means the current slump can be attributed to the ongoing gloomy outlook around Bitcoin (BTC) price, which is trading at $25,813 at the time of writing.

The current slump provides an opportunity for short traders to make a profit. Traders who opened short positions before the token unlock are probably the only cohort enjoying the current slump. The likely turnaround point for INJ is around the $6.853 support level.

If the $6.853 level fails to hold as a support level, the Injective price could continue south, potentially tagging the $5.438 range low. Such a move would constitute a 25% move south. Considering the Relative Strength Index (RSI) is grinding south, bears could seize the opportunity.

INJ/USDT 1-day chart

On the other hand, with the histogram bars of the Awesome Oscillator pointing north, bulls could steady and restore the Injective price above the ascending trendline at $7.893. In a highly bullish case, the altcoin could extend above the $8.257 resistance level before tagging the supply zone. 

Rejection from this supply zone could cap the Injective price, but if this order block fails to hold as a resistance level, INJ could break through it, rendering it a bullish breaker before foraying north to the levels above $9.970. 

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