Internet Computer bulls reclaim $5.5 – Why ICP may not revisit $5 this week
Can Internet Protocol token shrug off the pessimistic market-wide sentiment and almost double in value from here?
Key Takeaways
Why is ICP a potential buying opportunity?
Internet Protocol has outperformed many altcoins over the past 24 hours, posting strong double-digit percentage gains. This relative strength shows that a rally to $9.8 is likely.
What is the invalidation for ICP bulls already in swing positions?
The $5.1-$5.5 was a local demand zone that has been retested in recent hours. It was unlikely that the price would drop lower in the coming days.
Internet Computer [ICP] rallied 17% on the 18th of November, and could climb even higher.
The daily session was not yet closed at the time of writing. Also, the high daily trading volume of $858 million indicated heavy demand.
Its gains represented relative short-term strength as other popular altcoins, such as Binance Coin [BNB] and Solana [SOL], shed value on the day.
It saw a 20% increase in Open Interest in 24 hours, and its spot CVD showed rising demand recently.
However, Coinalyze data showed the Funding Rate was negative, even as prices climbed higher. This was a sign of a short squeeze. The market had been overly pessimistic during the retest of the $5.5 local resistance.
A continued price move higher would force these short positions to close, spurring prices higher. What was the importance of $5.5, and why was the market convinced to take bearish positions?
The ICP retracement might have confounded expectations
Based on the rally earlier in November, the Fibonacci retracement levels showed that $4.3 was ripe for a bullish reversal. It also had confluence with the former resistance zone at the same level as in October.
It could be that during the price bounce in recent hours, some market participants expected $4.3 to be retested before a reversal. The market-wide bearish sentiment might also have influenced speculators’ decisions.
The bullish swing structure and the steady demand reflected by the OBV meant that ICP was likely to trend higher once again. The local high at $9.84 is a feasible target over the next week or two.
The 4-hour chart also revealed a bullish price structure and momentum. Moreover, the $5.5 zone, which had been a local resistance, was quickly flipped to a demand zone.
Hence, it was unlikely that ICP prices would drop to $5 or lower within this week.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
