Injective Protocol's INJ token fell 3% intraday to $5.01, but the selloff didn't shake out the big players. Open interest climbed 6.67% during the drop, and net positioning among smart money remains long, a combination that points to a shakeout rather than a breakdown.
What the numbers show
The price flush came with a notable rise in open interest, meaning new positions were opened even as the price dipped. That's a classic sign of fresh money entering the market on the long side, not a wave of panic selling. Smart money, which typically refers to large, informed traders, holds a net long position in INJ, according to the data.
At $5.01, INJ is trading near a level that has attracted buying interest before. The 3% decline is modest in the context of crypto's usual swings, but the open interest surge makes it stand out. When open interest rises during a price drop, it often signals that leveraged longs are being tested, not that the trend has reversed.
Reading the flush as a shakeout
The interpretation here is that the move is a shakeout—a deliberate or accidental dip that forces weak hands to exit before the price resumes its upward path. The fact that smart money remains net long supports that view. If the drop were a true breakdown, you'd expect to see open interest fall as traders close out positions and smart money flip short. Instead, the opposite happened.
Shakeouts are common in crypto markets, especially after a period of consolidation. They clear out leveraged traders who are overextended, making the next leg up easier to sustain. The rising open interest during the flush suggests that new longs are stepping in to buy the dip, which is a bullish signal.
The squeeze setup
If the shakeout thesis holds, the next target is $5.90. That would represent a gain of nearly 18% from the current price. A move to that level would likely trigger a short squeeze, forcing traders who bet against INJ to cover their positions and adding fuel to the rally.
The setup is not guaranteed, of course. The price needs to hold above $5 and show signs of buying pressure. But the data—rising open interest, smart money long, and a dip that looks like a flush—suggests the path of least resistance is higher.
Traders will be watching whether INJ can reclaim its recent highs and push toward the $5.90 target. If the shakeout was successful, the move could come quickly. If not, the price may need to test lower levels before finding support.
