In the last week, the price of INJ, the token that powers Injective, has risen by almost 10%. 

While the price rally might indicate a shift in market sentiment from bearish to bullish, a key metric reveals that it has been driven by speculative buying activity.

Injective Traders May Soon Begin Selling For Profit

An assessment of INJ’s Price-Daily Active Address (DAA) Divergence metric suggests that the recent uptick in the altcoin’s value might be short-lived.

This metric compares an asset’s price movements with the changes in its number of daily active addresses. Investors use it to track whether the price movements are supported by corresponding network activity.

At press time, INJ’s Price-DAA Divergence is 154.52%. This suggests that the coin’s price has risen significantly compared to the growth in its daily active addresses. There is a 154.52% difference between the altcoin’s price and the change in daily active addresses.

Read More: 9 Cryptocurrencies Offering the Highest Staking Yields (APY) in 2024

When this metric spikes like this, it suggests that the asset’s price has risen without a corresponding increase in network activity. It signals that the price rally may have been driven by speculative buying or potential overvaluation.

At this point, traders are known to begin profit-taking.

INJ’s Market Value to Realized Value (MVRV) ratio confirmed that the coin may be overvalued. As of this writing, the metric’s value is 128.71%.

This metric measures the ratio between an asset’s current market price and the average price at which all its coins or tokens were acquired. 

When its value is above one, the asset’s current market value is significantly higher than the price at which most investors acquire their holdings. It is deemed overvalued, and most traders sell for profit at this level. 

INJ Price Prediction: The Current Uptrend is Not Strong Enough

While its price has managed a 9% uptick in the last week, INJ’s market remains dominated by bears. For example, readings from its Directional Movement Index (DMI) confirm this. 

This indicator measures an asset’s trend strength. At press time, INJ’s negative directional index (red) at 29.40 rests above the positive index (blue) at 19.83.

When an asset’s DMI is set up this way, it is a bearish signal, suggesting that selling pressure outweighs the asset’s demand. 

INJ’s Aroon Up Line is at 0%, suggesting a weak current uptrend. This indicator measures an asset’s trend strength and identifies potential price reversal points. 

When the Aroon Up line is close to zero, the uptrend is weak, and the most recent high was reached a long time ago.

Once the speculative buying stops, INJ will shed all its gains and trade at $19.67.

However, if the current trend continues and actual demand for the coin begins to climb, it may rally toward $22.80. 

Polkadot’s (DOT) price will likely react to the positive shift in investors’ sentiment despite the negative price development.

The chances of a breakout are high, given the altcoin is moving within a descending channel pattern.

Polkadot Holders Are Bullish

Polkadot’s price could witness the impact of DOT holders changing their tone towards the asset. The evidence of this can be found in the Chaikin Money Flow (CMF), which has entered the positive zone after nearly a month.

This shift indicates a significant surge in buying pressure, suggesting that investors are showing renewed interest in Polkadot.

The positive CMF is a key indicator of market sentiment, highlighting that money is flowing into Polkadot. This influx is often associated with increasing demand and potential upward price movement, making it an essential metric for traders to monitor.

Read More: What Is Polkadot (DOT)?

In addition to the CMF, Polkadot’s funding rate is also slightly positive, signaling a balance between long and short contracts. This equilibrium indicates that the market sentiment is leaning towards optimism, with a preference for long positions.

The positive funding rate and CMF together suggest that long contracts are currently dominating the market. This dominance could lead to sustained bullish momentum for Polkadot, encouraging more investors to consider long positions.

DOT Price Prediction: Short Surge Ahead

Polkadot’s price is presently moving within a descending channel, attempting a breakout every few days. A descending channel is a chart pattern characterized by a series of lower highs and lower lows. It typically indicates a bearish trend, with prices moving downward between parallel lines.

Based on the pattern, a breakout could send the altcoin rallying by another 6%, pushing it above $6.3. The market supports this outcome, and if DOT manages to leverage it, further growth will be on the cards.

Read More: Polkadot (DOT) Price Prediction 2024/2025/2030

However, if the breakout fails, Polkadot’s price could end up stuck within this pattern. A drop below $5.7 could send DOT to $5.2 or $5.0, invalidating the bullish thesis.

PancakeSwap, a decentralized exchange, has unveiled its AI-powered prediction market on the Arbitrum network. It is driven by the Allora Network’s artificial intelligence model.

Integrating Allora’s advanced machine learning models, PancakeSwap now offers predictive capabilities previously unseen in the platform.

How PancakeSwap Leverages Allora Labs’ AI Model

Over the last three years, Allora Labs (previously known as Upshot) has developed models that forecast prices for over 400 million assets. This expertise is now available to PancakeSwap users, combining AI-driven insights with an active trading environment.

“We’re excited to integrate Allora’s AI models into our prediction market. Now our users can test their prediction skills against AI, which will create another exciting form of prediction for our users,” Chef Gyoza, Product Manager at PancakeSwap told BeInCrypto. 

Read more: 14 Best AI Crypto Trading Bots To Maximize Your Profits

In this new AI-powered prediction market, users predict the future price movements of cryptocurrencies like Ethereum (ETH). Every 10 minutes, they can forecast whether the price of ETH will rise or fall. Successful predictions allow participants to earn a share of the prize pool, enhancing engagement through AI-enhanced accuracy.

“Our collaboration with PancakeSwap is a perfect example of how AI can be used to enable novel applications in DeFi.  With the convergence of AI and crypto, prediction markets are on the cusp of a significant transformation that will greatly expand their role in society,”  Nick Emmons, Co-Founder of Allora Labs, told BeInCrypto.

First, AI models from Allora predict asset price movements. Users then place their bets, either supporting or opposing the AI’s predictions.

Payouts are based on the AI’s performance, with the structure adjusting over time to maintain fairness and challenge. Currently, PancakeSwap’s prediction market focuses exclusively on cryptocurrency prices.

Read more: How To Use PancakeSwap: A Step-By-Step Guide

However, platforms like Polymarket are making a stride in the prediction market. They cover a wide array of topics beyond cryptocurrencies, including culture, technology, sports, and politics.

In May, Ethereum co-founder Vitalik Buterin and PayPal co-founder Peter Thiel backed Polymarket with a $70 million investment, highlighting its significance in the prediction market. This platform allows users to engage with global events in real-time, offering a decentralized environment for predictions.

It gained popularity with the upcoming US Presidential elections. Even Donald Trump used a screenshot from Polymarket to boast about his odds of winning the election.