Internet Computer’s （ICP） price faces potential declines despite bullish sentiment, as key technical indicators suggest increasing selling pressure.
Points
- ICP has fallen 5% in the last 24 hours.
- The Money Flow Index （MFI） indicates overbought conditions.
- ICP’s price trend is closely linked to Bitcoin’s performance.
- Weighted Sentiment around ICP is improving but not enough to ensure a price increase.
- Technical analysis suggests potential support at $8.45 and resistance at $10.28.
Internet Computer （ICP） may extend its recent losses after a 5% drop in the last 24 hours. BeInCrypto’s analysis of the token’s technical and on-chain status suggests further declines could be imminent. At press time, ICP is trading at $9.03, but maintaining this level may prove challenging.
A crucial indicator for ICP’s price movement is the Money Flow Index （MFI）, a technical oscillator that uses volume and price to gauge trading pressure. The MFI indicates overbought and oversold conditions, with readings above 80.00 signaling overbought status. On July 21 and again on July 26, ICP was overbought, leading to a price retracement. As money exits the ICP market, the price may continue to drop.
Seven days ago, BeInCrypto noted the correlation between ICP and Bitcoin （BTC）. The current price trend shows this relationship remains strong, as Bitcoin’s price has also dropped.
Despite a bearish outlook, on-chain data from Santiment reveals that sentiment around ICP is not entirely negative. The Weighted Sentiment measure shows that online discussions about ICP have shifted from negative to positive. However, this alone is insufficient to drive a price increase.
From a technical perspective, ICP formed a rounded bottom pattern between June 16 and July 18, indicating a shift from bearish to bullish trends. This pattern helped ICP reach $10.95 on July 22, but the gains have since been eroded. The daily ICP/USD chart shows bulls attempting to hold the $9 level. However, the Cumulative Volume Delta （CVD） is negative, indicating that selling pressure dominates. If buyers fail to halt the decline, ICP risks falling below the key support at $8.45. Conversely, increased buying pressure could push ICP towards the resistance at $10.28.
Explanation
- The Money Flow Index （MFI） is critical in assessing ICP’s price potential, with recent overbought signals leading to price retracement.
- The correlation between ICP and Bitcoin suggests that ICP’s price movements are influenced by broader market trends.
- Positive Weighted Sentiment indicates growing confidence among ICP holders, but it must be supported by technical factors to drive price increases.
- Technical patterns like the rounded bottom can signal shifts in market trends, but these need to be reinforced by consistent buying pressure.
- Understanding support and resistance levels helps predict potential price movements, providing strategic entry and exit points for traders.
