Analysis
ICP Coin soars 37% in last 7 days, will the rally continue?
Internet Computer token has retraced a good chunk of its recent gains and could drop even lower.
- ICP retained its bullish bias despite the drop in prices
- This pullback could be followed by a period of consolidation
Internet Computer [ICP] outperformed Bitcoin [BTC] based on the price movement from 12th October to 16th December. ICP climbed by 312%, which is a lot of money, so who cares if the token is funnily named?
By comparison, BTC advanced only by 60%, but their market caps are vastly different. In the past few days, ICP witnessed a large pullback as bullish momentum weakened.
The rally halted just shy of $12
Source: ICP/USDT on TradingView
Based on the three-month uptrend from $2.87 to $11.9, a set of Fibonacci retracement levels (pale yellow) were plotted.
In May 2022, the $12 region had served as support for a couple of weeks, which could be why ICP halted there this time. It could also be that the market was wildly overextended.
The RSI on the 1-day chart reached 90.5 on 17th December, a high it has not reached since ICP trading began on Binance. The 80 level has been a cap during previous rallies, which underlined this one as extraordinary.
To the south, the $8.64 and $7.25 were former resistance levels from the weekly timeframe. They could serve as support during a pullback, as could the 61.8% and 78.6% Fibonacci levels at $6.32 and $4.8.
The Open Interest chart was illuminating
Source: Coinglass
When the ICP prices were rocketing skyward, market participants were eager to speculate on the token. This added to the Open Interest behind ICP, which saw the chart trend tremendously higher in December.
Is your portfolio green? Check the ICP Profit Calculator
However, the OI began to dip over the past few days alongside the prices. This showcased a weakened bullish sentiment compared to a week ago.
Yet the OI remained high, but it was unclear whether prices could defend the $8 support level.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
