Can Injective rebound after Drop to $3.40 amid crypto weakness?

Injective price is down nearly 5% in the past 24 hours, extending recent losses to $3.40 after bulls ran into resistance at the $4.00 mark.

The INJ token also declined amid a broader market downturn following the Federal Reserve's rate decision.

Investors concerned about the ongoing blockade of the Strait of Hormuz and surging oil prices also pushed Bitcoin lower.

Injective dropped alongside BTC.

Injective dips after mainnet upgrade

Injective Protocol recently hit a milestone with the activation of its IIP-632 mainnet upgrade, a governance-approved initiative designed to sharpen network efficiency.

Market optimism ahead of the rollout propelled INJ to a peak of $4.00, fueled by expectations of bolstered technical performance, refined onchain modules, and expanded $INJ token buyback programs.

The upbeat sentiment looks to be fading fast amid profit-taking by short-term holders.

Also pushing bulls into the woods are macroeconomic headwinds, with cryptocurrencies retreating alongside other risk assets.

Bitcoin's plunge followed the Fed's decision to maintain interest rates unchanged, and Chair Jerome Powell's announcement that he will stay on as a Fed member after his tenure ends in May.

President Donald Trump's remarks endorsing an intensified blockade of the Strait of Hormuz also ignited fears of global energy disruptions.

The news drove oil prices higher and soured risk assets, with BTC's dip cascading weakness into altcoins and crypto stocks.

More than USD 560 million (approx. $816.1 million) in crypto positions were liquidated, with the metric’s 24-hour reading indicating longs at USD 368 million (approx. $536.3 million) and shorts at USD 192 million (approx. $279.8 million).

According to Coinglass data, the pain hit more than 120,000 traders.

INJ mirrored this performance, testing lows around $3.40 amid subdued trading.

Injective price outlook

Network growth, helped by the upgrade's fundamentals, suggests the long-term outlook for INJ remains intact.

However, near-term sentiment hinges on how the market reacts to macro and geopolitical pressures.

From a technical standpoint, INJ's chart reveals a slight bearish tilt.

The Relative Strength Index (RSI) at 57 and downsloping hints at a possible short-term drop.

Meanwhile, the Moving Average Convergence Divergence (MACD) signals a bearish crossover, with the histogram pointing to increased weakness.

The token now hovers near the $3.40 support zone, a level reinforced by recent volume clusters.

Holding this threshold could foster consolidation, paving the way for a rebound toward $4.00.

Bulls could target further gains if Bitcoin stabilizes and sees a notable uptick above $75,000 - the benchmark digital asset currently hovers around $76,075, down 1.2% in the past 24 hours.

Most coins show similar moves during early trading on Thursday.

Conversely, a decisive break below $3.30 and the 50-day exponential moving average ($3.25) amid elevated sell volume could accelerate declines toward the $2.75 demand area.

The area marks March lows and could allow sellers to target lower support levels.