Injective's token, INJ, climbed 12.56% in the past 24 hours, putting the price right on top of a level that traders have been watching for days. The move has left the market split between those betting on a short squeeze and those who see a trap.
The $4.96 decision point
INJ is now trading around $4.96, a price that technical traders have flagged as the line between a run toward $5.15 and a rejection that could send the token back down. The 50-day simple moving average sits at $4.78, which means the recent rally has already pushed the token above that trend indicator.
What makes $4.96 so important is the positioning underneath it. Retail traders are 58.2% short on INJ, according to exchange data. That's a heavy imbalance, and it sets up the classic conditions for a short squeeze: if the price pushes through $4.96, those shorts may be forced to buy back, adding fuel to a move toward $5.15.
Short squeeze or bull trap?
The setup is being described in two ways. One camp sees a textbook short squeeze in the making — a crowded short side, a key resistance level, and momentum from the last 24 hours. The other camp warns of a bull trap, where the price briefly breaks above $4.96, sucks in buyers, then reverses sharply as the shorts reload.
There's no way to know which outcome wins from the data alone. The 58.2% short figure is a snapshot, not a prediction. And the 12.56% gain, while sharp, has not yet been tested against the $4.96 ceiling.
What a break above $5.15 would mean
If INJ does clear $4.96 and moves toward $5.15, the short squeeze scenario becomes more than just talk. The distance from $4.96 to $5.15 is only about 4%, but for traders holding short positions, that move could trigger stop-losses and margin calls, accelerating the climb.
If the price stalls at $4.96 and falls back below the 50-day SMA at $4.78, the bull trap narrative gains credibility. In that case, the shorts who were squeezed out might re-enter, and the token could give back much of its recent gains.
For now, the market is holding its breath around $4.96. The next few hours, or days, will tell whether this is the start of a real squeeze or just another fake-out.
