Injective (INJ) Plunges to $3.65: Could Rally to $48 Amid Supply Squeeze

Injective (INJ) fell to $3.65 on Saturday, January 31, 2026, down 7.37% in the past 24 hours, according to CoinMarketCap data. Daily trading volume also declined 19.84% to $51.28 million, marking a 19.96% loss over the past week.

The decline reflects ongoing selling pressure across the crypto market, with investors monitoring both technical levels and new protocol updates closely.

Market analysts attribute part of the short-term weakness to INJ’s positioning within a long-term descending channel, a structure that has dominated its weekly price action. Despite recent losses, some technical signals indicate a potential bounce from the current support zone.

Injective Tests Key Support Level

In X post, Crypto analyst Jonathan Carter notes that Injective is currently testing the lower boundary of the descending channel on the weekly chart. “The token shows resilience at this key support level,” Carter said. “A successful bounce could target $7, $10, $16, $25, or even $48, though these moves are likely corrective rather than a full trend reversal.”

The price has consistently respected the channel’s upper and lower trendlines, with each rally resulting in lower highs and pullbacks grinding toward lower lows.

Volume trends support the bearish dominance: trading activity expands during sell-offs but contracts during upward moves. Carter advises that “unless INJ breaks above the descending channel with strong volume, any short-term rally should be treated as a selling opportunity.”

Injective’s Long-Term Monetary Design Update

Beyond short-term market dynamics, Injective’s latest update focuses on long-term monetary design. The INJ Supply Squeeze tightens issuance dynamics at the protocol level and works in parallel with Injective’s existing Community BuyBack and burn mechanisms. Once fully implemented on-chain, the framework is expected to double the rate of INJ deflation.

Since the launch of the Injective mainnet, approximately 6.85 million INJ tokens have been permanently removed from circulation through recurring burn mechanisms.

Under the updated model, ecosystem-generated revenue will continue to fund monthly buyback and burn events, reinforcing the link between network usage and token supply contraction.

Eric Chen, co-founder of INJ, said the update represents a significant step in strengthening the network’s economic foundation. He stated that accelerating deflation while maintaining systematic buybacks positions INJ as a long-term deflationary asset aligned with ecosystem growth.

Also Read | Injective Price Analysis: INJ Targets $5.05 While $4.40 Support Holds