Over the past few weeks, Internet Computer (ICP) has been unable to establish a clear trend, remaining in a phase of consolidation after breaking out of a rising wedge pattern on the daily chart.
As uncertainty lingers, the price of the altcoin has encountered strong resistance.
Is ICP Primed for a Breakout from Consolidation?
ICP faced resistance at $8.3 recently, resulting in a decline below its 20-day EMA ($8.1) and 50-day EMA ($8.2), signaling a bearish sentiment. At the moment, ICP is trading at $7.957, staying within the range of $7.6 to $8.3.
If the current subdued sentiment persists, ICP is likely to continue moving between the $7.6 and $8.3 levels in the short term. Overcoming the critical resistance at the 200-day EMA of $9.0971 is crucial for establishing a long-term bullish trend.
The MACD indicator suggests weak momentum, with the MACD line and signal line closely positioned in negative territory. This indicates that any bullish momentum may be fragile unless ICP manages to break above immediate resistances.
The immediate support is at $7.648, aligned with the lower boundary of the current trading range. A drop below this level could see ICP finding buyers near the trendline support at $7.00.
Breaking the key resistance at $8.3 is essential as it could propel ICP towards the 200-day EMA around $9.
Derivative Data Unveils Key Insights
ICP’s trading volume has declined by 24.59% to $53.90 million, indicating reduced activity in the current range-bound market.
The long/short ratio for ICP in the last 24 hours stood at 0.7724, indicating a slight favor towards shorts and reflecting a bearish tilt in the broader market sentiment.
However, on Binance, the ICP/USDT long/short ratio is 2.9, indicating a more optimistic outlook among traders on the platform.
Leading traders on Binance maintain a bullish bias, with a long/short ratio of 3.1 (accounts) and 1.6 (positions), hinting at an expected near-term upturn.
To break free from the consolidation phase, ICP bulls need to secure a decisive close above the $8.3 resistance level. Failure to do so could prolong the consolidation and prompt a test of the $7.648 support.
Traders should keep a close watch on Bitcoin’s market trend, as it can significantly impact ICP’s short-term price action.