Internet Computer (ICP) entered 2022 with a big hit.
The ICP price is up more than 56% in the first five days of the new year, reaching a 30-day high of $ 38 on January 5th. Its massive upward movement was accompanied by a sharp increase in trading volume, confirming a strong and healthy bullish sentiment regarding the current moment.
ICP / USD daily price chart. Source: TradingView
At the heart of the recent rise in ICP rates has been a flood of optimistic news.
This includes Binance’s decision on 4 January to include a financial instrument that allows traders to exchange ICPs directly to / from their Ethereum Ether (ETH) token, as well as the launch on 22 December of Terabethia, a bridge between blockchains, that allows Ethereum tokens can be ERC – 20 is already in the Internet’s computational blockchain.
In addition, the increase in the number of smart contract platform tokens, especially in the last seven days, may increase the appetite of ICP traders.
Perform smart tokens for the contract platform. Source: messari
Downward trend stock
However, the ICP still risks cutting its recent gains completely as it tends to fall within the range of a multi-month bearish channel.
Especially on January 5, the price of the Internet computer token reached the upper trend line of the channel, exposing itself to the risk of sales. This is primarily due to the history of attempts to narrow the trend line to increase PMS, as shown in the chart below.
ICP / USD daily price chart in a descending channel pattern. Source: TradingView
Meanwhile, recent data also show that a withdrawal from the upper trend line has pushed the ICP price towards the channel’s lower trend line. Because of this, the ICP risks falling to new price levels despite the bullish rise.
Additional signals to identify the ICP withdrawal came from other resistance around $ 37.70 and the revaluation risk associated with the daily RSI.
The $ 37.70 level that helped the ICP limit its downward exposure between September and November 2021 coincides with the 0.236 Fibonacci line on the Fibonacci retracement chart, ranging from a high turn of $ 89 to a low turn of $ 22.
Meanwhile, the RSI was close to 67.50 at the time of publication. A reading above 70 makes ICP an overbought asset, which can lead to a certain degree of price correction / consolidation. If this happens, the ICP price could fall to zero Fibonacci line around $ 22.
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On the contrary, a closure above the $ 37.70 level could cause the Internet computer to choose $ 47.50 as its next upside target.