ICP Surges 22% but Faces 8% Dip – What’s Next After This Market Volatility?

Summary:
ICP recently saw a significant price surge, gaining 22.6% from a low point. However, the cryptocurrency has encountered a minor setback, dropping by 8% shortly after. Insights from the Dfinity Foundation highlight the potential for AI-driven tools to enhance blockchain stability, which may influence future price movements.

Key Takeaways

ICP rose by 22.6% before experiencing an 8% dip.
The Dfinity Foundation emphasizes the importance of AI-powered tools for stable blockchain infrastructure.
The current market sentiment remains bearish, particularly for Bitcoin.
Traders should remain cautious until ICP surpasses the $3.78 resistance level.

ICP experiences high volatility - Is it bullish after reclaiming $3 as support?

Recent Price Movements of ICP

ICP 3-day Chart
Source: ICP/USDT on TradingView

Recent analysis of ICP indicates a bearish trend, retracting the gains made throughout the month of November where it climbed from $2.79 to $9.85. Expectations had originally suggested that support levels at $5 and $4.3 would hold, but this has not occurred.

The Directional Movement Index (DMI) has provided mixed signals, capturing the rapid price movement followed by a pullback. Additional indicators, including On-Balance Volume (OBV) and the Moving Average Convergence Divergence (MACD), showcase bearish momentum as well.

For ICP to shift towards a bullish outlook, it needs to regain a price above $3.78.

Analyzing ICP's Short-Term Price Action

ICP 4-hour Chart
Source: ICP/USDT on TradingView

Looking at the 4-hour chart, there is a notable imbalance near the $3.2 mark following a bullish structure break. At the time of writing, ICP had dipped by 8.46% in just under 12 hours.

Although technical indicators seem to favor a bullish turn, traders must remain mindful of the prevailing bearish trend on higher timeframes. Caution is advised for those considering bullish positions until ICP clears the $3.78 mark.

What’s Next for ICP?

Current market sentiment is largely bearish, particularly regarding Bitcoin (BTC). Until market conditions improve, altcoins that have recently surged like ICP may face significant selling pressure as traders take profits.

Short-term traders may find opportunities to buy ICP now, placing a stop-loss order below the local support level at $2.9.

Traders' Strategy – Stay Bearish

Swing traders should adopt a bearish stance until the $3.78 level is broken, confirmed by a candle close on a 3-day timeframe. The 1-day chart also indicates the same local resistance as a significant swing point.

Conclusion

Disclaimer: The information provided is for informational purposes only and should not be taken as financial, investment, or trading advice. It reflects the author's personal opinions.