Injective (INJ) has experienced a catastrophic decline, losing approximately 90% of its value from a peak market capitalization near $4 billion to roughly $300 million. Analysis from Our Crypto Talk highlights that this dramatic correction was preceded by multiple warning signals that the market overlooked during the token's vertical rally.
The core issue was a severe disconnect between valuation and measurable fundamentals. At its peak valuation, Injective's Total Value Locked (TVL) remained under $100 million, indicating a lack of capital commitment and usage depth to justify a multi-billion dollar price tag. Our Crypto Talk emphasized that this gap was "impossible to ignore" in the brutally competitive DeFi environment, where other chains offered cheaper fees and deeper liquidity.
Technical structure also showed early signs of weakness. A critical failure occurred when INJ price attempted to reclaim the $10 level—a previous breakout zone—in late 2025 and was rejected. This signaled fading buyer conviction. Momentum indicators like the RSI never regained meaningful strength, and the downward trend channel remained intact, with former support levels flipping to resistance.
Further pressure came from supply concentration. A significant portion of INJ's supply is held in infrastructure-linked wallets, such as a "Peggy Bridge Proxy" wallet holding roughly $248 million of the current $311 million market cap. This concentration reduces the effective circulating supply, creating a thinner tradable float that amplifies volatility, enables sharper drawdowns, and makes recovery phases slower and more difficult.
As of the report, INJ trades around $3.20 with a 24-hour trading volume of $35.96 million. The analyst frames the current stage as a "correction and recalibration" rather than a final outcome. For a sustainable recovery, Injective would need to demonstrate measurable expansion in TVL, stronger derivatives activity, broader participation beyond concentrated holders, and a technical structure capable of reclaiming lost resistance zones. The narrative premium has vanished, and the market now demands proof of real usage and sustained capital inflows.
