Internet Computer (ICP) corrected after almost 60% increase

Internet Computer (ICP) entered 2022 with a huge success. ICP price rose more than 56% in the first 5 days of the new year, hitting a 30-day high of $ 38 on Jan 5th. This upward move was accompanied by an increase in trading volume and met a strong and healthy uptrend feeling.

Internet Computer (ICP) is likely to adjust after increasing nearly 60% in 5 days

Internet Computer / USD price chart of the daily framework | Source: TradingView

The recent Internet Computer rally was triggered by a flurry of positive news, including Binance’s decision to be listed as a financial instrument on January 4th, allowing traders to switch directly between Internet Computer and Ether, and the launch of Terabethia , a cross-chain bridge, on December 22nd that enables Ethereum’s ERC-20 token to live natively on the internet computer blockchain.

Alternatively, a rally of smart contract tokens could have whipped traders’ appetites for Internet Computer.

Internet Computer (ICP) is likely to adjust after increasing nearly 60% in 5 days

Token performance smart contract | Source: Messari

Downward trend unchanged

However, the Internet Computer still risks losing all of its recent gains as it tends to trade lower within a multi-month descending channel area.

In particular, Internet Computer price touched the channel’s upper trendline on Jan 5th, so there is a risk of a sell-off. This was mainly due to the history of the upper trendline which constrained Internet Computer’s attempt to hike the price, as shown in the chart below.

Internet Computer (ICP) is likely to adjust after increasing nearly 60% in 5 days

ICP / USD price chart with daily frame and descending channel pattern | Source: TradingView

Meanwhile, recent data also shows that a pullback from the upper trendline has pushed ICP price towards the lower trendline of the channel. As a result, there is a risk that the ICP will drop to new lows despite the recent rally.

Against strong resistance

Further signs of ICP pullback come as it encounters further resistance near $ 37.7 and risk of overvaluation by the daily relative strength index (RSI).

The $ 37.7 level helped ICP limit the downside for September-November 2021, which coincides with the 0.236 line on the Fibonacci retracement chart from the local high of $ 89 to the low of $ 22.

Internet Computer (ICP) is likely to adjust after increasing nearly 60% in 5 days

Meanwhile, at press time, the RSI is close to $ 67.5. A value above 70 would make ICP an overbought asset, potentially leading to a price correction / consolidation to some extent. If this happens, there is a risk that ICP price will fall to the 0 Fib line near $ 22.

Conversely, a close above $ 37.7 could give ICP momentum towards the next upside target at $ 47.5.

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Internet Computer (ICP) corrected after almost 60% increase

Internet Computer (ICP) entered 2022 with a huge success. ICP price rose more than 56% in the first 5 days of the new year, hitting a 30-day high of $ 38 on Jan 5th. This upward move was accompanied by an increase in trading volume and met a strong and healthy uptrend feeling.

Internet Computer (ICP) is likely to adjust after increasing nearly 60% in 5 days

Internet Computer / USD price chart of the daily framework | Source: TradingView

The recent Internet Computer rally was triggered by a flurry of positive news, including Binance’s decision to be listed as a financial instrument on January 4th, allowing traders to switch directly between Internet Computer and Ether, and the launch of Terabethia , a cross-chain bridge, on December 22nd that enables Ethereum’s ERC-20 token to live natively on the internet computer blockchain.

Alternatively, a rally of smart contract tokens could have whipped traders’ appetites for Internet Computer.

Internet Computer (ICP) is likely to adjust after increasing nearly 60% in 5 days

Token performance smart contract | Source: Messari

Downward trend unchanged

However, the Internet Computer still risks losing all of its recent gains as it tends to trade lower within a multi-month descending channel area.

In particular, Internet Computer price touched the channel’s upper trendline on Jan 5th, so there is a risk of a sell-off. This was mainly due to the history of the upper trendline which constrained Internet Computer’s attempt to hike the price, as shown in the chart below.

Internet Computer (ICP) is likely to adjust after increasing nearly 60% in 5 days

ICP / USD price chart with daily frame and descending channel pattern | Source: TradingView

Meanwhile, recent data also shows that a pullback from the upper trendline has pushed ICP price towards the lower trendline of the channel. As a result, there is a risk that the ICP will drop to new lows despite the recent rally.

Against strong resistance

Further signs of ICP pullback come as it encounters further resistance near $ 37.7 and risk of overvaluation by the daily relative strength index (RSI).

The $ 37.7 level helped ICP limit the downside for September-November 2021, which coincides with the 0.236 line on the Fibonacci retracement chart from the local high of $ 89 to the low of $ 22.

Internet Computer (ICP) is likely to adjust after increasing nearly 60% in 5 days

Meanwhile, at press time, the RSI is close to $ 67.5. A value above 70 would make ICP an overbought asset, potentially leading to a price correction / consolidation to some extent. If this happens, there is a risk that ICP price will fall to the 0 Fib line near $ 22.

Conversely, a close above $ 37.7 could give ICP momentum towards the next upside target at $ 47.5.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page

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