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Is INJ undervalued right now?

Updated: Nov 19, 2024
Published: May 15, 2024
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Across the market, many assets, including the larger caps, seem to show signs that the bearish momentum is slowing down. Key levels of support are holding up, and short-term trends to the downside are breaking.

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Hypothesis

Injective (INJ) is an asset that we believe is undervalued due to negative overall market sentiment, which is pulling prices down across the board.

We now have positive CPI data, which the market has reacted to positively, as expected. Therefore, we are banking on some further upside when we consider all of these factors.

Let's break down the technical analysis.

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. "One Glance" by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. These are not signals, and they are not financial advice.

Technical analysis

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INJ was one of the strongest movers in the market at the start of October. When you take a Fibonacci retracement from this level as point A to the all-time high, you see the price is currently trading with demand being shown at the 61.8% Fibonacci level.

Alongside this, we had a short-term trendline breakout, which was taken from significant swing points to the downside. The LOIs we are looking at, forming the yellow buy box, are $23.40 & $22.17.

We saw the market react significantly on the sell side in April-May 2021.

This is a key sell-off point we have seen hold weight across the market. Just before the positive CPI print, we had a deviation that could have grabbed some liquidity.

Play for traders

  • Scenario 1: Get in at the market now.
  • Scenario 2: Allow a clean reclaim of the LOIs and enter for further validation.

Risk and reward

We are looking for a minimum of a 3.68 risk-to-reward ratio, meaning if you risk $1000, you would get $3,680 if the trade came in and took profit.

Again, with this ratio, it's a 25% win rate, which breaks you even. Stick to risk management.

  • Stop Loss - $18.99

Take profit

  • TP 1: $30.50
  • TP 2: $34.20

Play for investors

The whole market, for the most part, is in a relatively large pullback, and with this soft inflation print, it may be a good time to get positioned in assets like INJ, which has already shown such huge promise in this cycle.

Cryptonary's take

Positive inflation allowed for short-term further upside as risk assets will take this very positively. Stick to the risk management protocols and allocate sensibly.

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