According to a tweet from the Injective team, about 5,000,000 INJ tokens will be burned (or forever destroyed) today.
It is not hard to conclude that this 5,000,000 burn is the largest token burn in the history of the Injective protocol. As per the announcement from the Injective team, the token burn is expected to happen today (Wednesday) at 14:00 Central European Time (14: 00 CET).
The price action of INJ has responded positively to the news and has soared by as much as 15% since the announcement, according to data from CoinMarketCap.
INJ started the day at an intra-day low of about $1.59. Over the course of the last 12 hours, the cryptocurrency soared to the $1.81 zone in a single 15% move to the upside and has now reversed its trajectory to the $1.74 zone where it now sits.
A single Injective token is worth about $1.7 at the time of writing. This means that the INJ burn scheduled for today will permanently destroy about $10 million worth of INJ tokens.
Soon after the FTX crash, the price of INJ lost its footing around the $1.8 zone after staying above it since late October.
The market dump from the FTX crash sent the price of INJ to a monthly low of $1.38. It was last tested in September.
The cryptocurrency has attempted to get back above this $1.8 and has repeatedly failed. However, after another failed attempt at breaking through this support level on Wednesday last week, the cryptocurrency's price crashed to the $1.49 zone on Monday this week. It began to ascend again for another retest.
Overall, the price action of INJ is in an ascending triangle and is entering a squeeze as it repeatedly tries to break above the $1.8 resistance.
The announcement by the Injective team was apparently the fuel the INJ bulls needed to push the price of the cryptocurrency into another retest of this $1.8 zone, as illustrated above.
As expected, the bears were waiting for the bulls at the $1.8 zone and have now sent the cryptocurrency into a minor price reversal.
Over the last eight hours, the bulls have been fighting against the bears and are now trying to initiate another breakout. However, the bulls have their work cut out for them.
To initiate a clear breakout from $1.8, the price action of INJ has to close with a daily candle above the resistance before a possible rally to the $2 zone or beyond becomes possible.
If the bulls fail to push the cryptocurrency's price into a breakout, INJ may fall back and retest the bottom of the triangle around the $1.5 zone before another retest attempt.
Here is an interesting idea, though.
Prior to the crash of FTX and the crash that came with it, the price of INJ was trading within an ascending trendline (illustrated above in red).
If the bulls manage to create a breakout from this $1.8 zone, it is sensible to assume that the price of INJ may be headed for a retest of the ascending channel it broke down when the FTX crash hit the market.
If such a retest happens, it will put the medium-term bullish target for INJ at about $2.3, which would be a 25% price increase from $1.8 to $2.3.
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