Cryptocurrency markets are no stranger to volatility, and Internet Computer (ICP) is the latest example of this. After surging by 22% over the weekend, ICP experienced an 8% drop shortly thereafter. This quick reversal has left traders questioning the next steps in the token’s trajectory.
Why Did ICP Rally?
The recent uptick in ICP’s price can be partly attributed to statements from Lomesh Dutta, Vice President of the Dfinity Foundation, the non-profit organization responsible for developing the Internet Computer blockchain. Dutta emphasized the potential of AI-powered no-code tools to revolutionize application development by creating secure and tamper-resistant infrastructure, preventing outages like the ones caused by the AWS incident in October.
This innovative positioning has brought renewed attention to Internet Computer, fueling optimism and spurring a rally in its value.
Technical Analysis: Key Price Levels to Watch
Despite its recent performance, ICP’s charts are providing mixed signals:
- The 3-day chart shows a bearish internal structure, with a full retracement of its earlier rally from $2.79 to $9.85.
- Support levels at $5 and $4.30 failed to hold, flipping the momentum bearish.
- The DMI indicates that no strong trend is currently in progress, mirroring the choppy price action.
However, for bulls to regain control, ICP must break above the crucial $3.78 resistance mark, confirmed by a 3-day candle close.
Lower Timeframe Opportunities
On the 4-hour chart, ICP has created an imbalance near the $3.20 zone, following a brief bullish structure break. While this presents short-term trading opportunities, caution is warranted due to the broader bearish structure.
Traders can consider entering at current levels with a stop-loss below $2.90. However, swing traders might prefer to wait for confirmation above $3.78 before initiating long positions.
Impact of Market Sentiment
Broader market sentiment plays a significant role in influencing altcoin performance. Bitcoin’s bearish trend has limited the potential upside for many altcoins, including ICP. As a result, profit-taking activity is likely to apply downward pressure until the overall sentiment shifts positively.
Takeaway for Traders
For those looking to trade ICP, understanding the key support and resistance levels is critical. Lower timeframe traders can capitalize on the minor support at $3.20, while swing traders should remain cautious until ICP breaches $3.78.
Additionally, as market movements remain unpredictable, staying updated on market trends and closely monitoring Bitcoin’s performance will be vital in making informed trading decisions.
Stay prepared and keep your crypto portfolio secure during volatile market conditions. Consider using a reliable hardware wallet like the Ledger Nano X, which offers robust security for your crypto investments.
