INJ's Critical Retest of 5.95: A Strategic Buy Opportunity or a Bear Trap?

Injective Protocol (INJ) is at a pivotal juncture. The token's recent price action around the $5.95 support level has ignited debate among traders and analysts: is this a setup for a bullish breakout, or a bear trap designed to lure in optimistic buyers? To answer this, we must dissect the technical patterns, historical precedents, and liquidity dynamics shaping INJ's trajectory.

The Wedge Pattern and 5.95: A Test of Conviction

INJ has formed a downward widening wedge on the 4-hour chart, a pattern historically associated with bullish recoveries in bearish markets, as noted in a Live Bitcoin News report. The wedge's validity hinges on INJ's ability to hold above $5.95. If successful, the pattern suggests a potential rally to $7.04 and $9.07. However, a breakdown below $5.95 would invalidate the wedge, opening the door to further declines toward $4.50 or lower, per the same report.

Volume dynamics add nuance. Recent trading activity near $5.95 has shown modest but consistent buying pressure, with volume spiking during key retests. This contrasts with the failed breakout at $8.07 in late 2024, where volume surged but failed to sustain momentum, leading to a 10% intraday drop, according to a LookOnChain post. The current retest appears stronger, but traders must remain cautious-volume alone is not a foolproof indicator.

Historical Breakouts: Lessons from the Past

Injective's history is a mixed bag of successful breakouts and failed attempts. In July 2025, INJ broke out of an ascending triangle, hitting a five-month high of $16.35, as reported in the Live Bitcoin News report. However, it failed to hold above $15, retreating sharply. Similarly, an inverse Head and Shoulders pattern in late 2024 suggested a potential 153% rally to $41, but the token collapsed after failing to close above $16.20, per the same report.

These examples highlight a recurring theme: liquidity grabs. When INJ breaks out, large holders often offload positions, creating false momentum. The current $5.95 retest must be evaluated through this lens. If the pattern mirrors the July 2025 breakout, a short-term rally could be followed by a sharp retracement. Conversely, a clean retest with no significant retracement (as seen in the $12.50 support flip in 2025, as reported in an Xt report) could signal a stronger trend.

Liquidity and Market Structure: The Binance Factor

A critical wildcard is Binance's scheduled INJ deposit and withdrawal suspension on November 11, 2025, to support a network upgrade, as noted in the LookOnChain post. This event could temporarily reduce liquidity, amplifying volatility around the $5.95 level. Historically, similar halts have led to sharp price swings due to reduced order-book depth. Traders should monitor volume spikes pre- and post-upgrade-sudden surges could indicate panic selling or forced buying.

Strategic Implications for Investors

For bullish investors, the $5.95 level offers a high-probability entry if the wedge holds. A close above $7.04 would confirm the pattern's validity, with $9.07 as a potential target. However, the risks are significant. A breakdown below $5.95 could trigger a cascade of stop-loss orders, accelerating the decline.

Bearish traders, meanwhile, should watch for signs of a trap. If INJ rallies above $5.95 but fails to sustain momentum (e.g., a false breakout), it could signal a liquidity grab. The recent $8.07 failure in late 2024 serves as a cautionary tale, as reported in the LookOnChain post.

Conclusion: A High-Risk, High-Reward Scenario

INJ's retest of $5.95 is a classic case of technical ambiguity. The wedge pattern and historical precedents suggest both bullish and bearish possibilities. For investors, the key is to balance optimism with risk management. A well-placed stop-loss below $5.95 could mitigate downside, while a breakout above $7.04 would validate the pattern.

As the Binance upgrade looms, liquidity dynamics will play a decisive role. In the words of one analyst: "INJ's next move will be dictated not just by price action, but by the invisible hand of market structure," as stated in the Live Bitcoin News report.