A Critical Fork in Injective's Road: Breakdown or Breakthrough?

Injective Protocol (INJ) has recently confirmed a breakdown from its long-standing ascending triangle, raising concerns among traders and technical analysts about a potential decline toward the $8 level. The triangle pattern, formed since March 2025 with resistance near $17, has now been invalidated after the price closed below key trendline support. This development aligns with a bearish projection that identifies Fibonacci retracement levels as potential support zones, including $11.46, $10.52, and $9.51, before the $8.29 target is reached [1].

Current price action shows INJ trading at $12.49 as of September 2, 2025, down 1.56% from the previous session. Momentum indicators provide mixed signals, with the Relative Strength Index (RSI) at 53 and the Moving Average Convergence Divergence (MACD) showing flattening trends. These readings suggest a lack of immediate upward strength, reinforcing the bearish outlook [2]. Analysts warn that a failure to reclaim the broken trendline could lead to a cascade of further support tests, increasing the risk of a sustained downtrend [2].

Despite these short-term concerns, Injective is undergoing a significant development that could act as a long-term catalyst. The Ethernia upgrade, launched recently, introduced Ethereum Virtual Machine (EVM) compatibility, allowing Solidity developers to deploy applications on Injective’s Layer 1 blockchain. Early reports indicate that 127 projects are already building on the testnet, with DeFi protocols leveraging the network for arbitrage opportunities between Cosmos and Ethereum [1]. This shift mirrors the success seen by platforms like Avalanche in 2021, when EVM compatibility led to a 327% price surge [1].

However, Injective faces stiff competition from well-established layer 2 solutions such as Polygon’s zkEVM and zkSync, which have already captured a significant portion of the cross-chain liquidity market. For Injective to capitalize on its EVM upgrade, it must attract a critical mass of developers and secure unique liquidity advantages that differentiate it from its rivals [1]. Analysts suggest that early developer traction could signal the token’s potential to reverse its bearish chart pattern and regain investor confidence.

Looking ahead, the market is closely monitoring whether INJ can hold above the $11.91 support level, a key psychological threshold that has historically prevented further declines [3]. A break below this level could trigger a more aggressive downtrend, targeting the $10.00 mark and potentially testing the annual low near $6.96 [3]. On the bullish side, breaking above $16.19 resistance would initiate a more optimistic trajectory, with price targets extending into the $20-25 range by October 2025 [3]. Analysts suggest that a successful breakout would require strong volume and sustained trading above the 20-day simple moving average [3].

In summary, Injective Protocol is at a pivotal juncture. While current technical indicators suggest a potential for further downside, the Ethernia upgrade provides a strong fundamental foundation that could support a long-term bullish turnaround. Traders are advised to closely watch both key technical levels and the token’s fundamental developments as the market balances bearish momentum with potential catalysts for recovery [1][2][3].

Source:

[1] Expert Predicts Brutal Injective Drop – But This Upgrade Could Flip Everything (https://coindoo.com/market/expert-predicts-brutal-injective-drop-but-this-upgrade-could-flip-everything/)

[2] INJ Price Breakout Signals Risk Toward $8 After Triangle Collapse (https://www.xt.com/en/blog/post/inj-price-breakout-signals-risk-toward-8-after-triangle-collapse)

[3] INJ Price Prediction: Target $20-25 by October 2025 Despite Bearish Momentum (https://blockchain.news/news/20250905-price-prediction-target-inj-20-25-by-october-2025-despite)