Internet Computer Surges 12% – Key Levels Ahead for ICP

Internet Computer [ICP]

The Internet Computer’s ICP token has recently experienced one of its most substantial rallies in weeks, with a shift towards bullish technical momentum. The token has seen a 12% increase, contributing to a market capitalization rise of $243 million, bringing its total market cap to roughly $1.95 billion at the time of writing. While the upward momentum is evident, several resistance levels still pose challenges for the token's price progression.

Possibility of a Move Toward $5

Internet Computer (ICP) successfully broke through a declining trendline that had limited its price action for more than two months. Such breakouts often indicate a potential trend reversal during previous market cycles. This development has reopened the possibility of reaching back toward the trendline's origin near $5.30, as indicated by historical price patterns. However, there are still several supply zones that could disrupt this upward trajectory.

The Liquidation Heatmap identified the nearest resistance at approximately $3.78. Should ICP surpass this level, the next significant area of resistance would be around $4.34, where selling pressure could potentially increase.

ICP price chart Source: TradingView

The Parabolic Stop and Reverse (SAR) indicator is currently showing dots below the price, signaling ongoing bullish momentum. This suggests that buying pressure remains strong, indicating ICP could rise into the $3.78 range, potentially triggering liquidations that might accelerate upward movement. As long as the SAR structure remains intact, buyers hold sway over the short-term trend.

Accumulation Present, But Distribution Persists

The Chaikin Money Flow (CMF), which assesses buying and selling pressure via volume over time, has demonstrated improved capital inflows in recent sessions. On a 20-day basis, the CMF recorded a score of 0.19, marking its highest level since early November. Generally, positive CMF figures connote that buyers are dominating volume flows, indicative of strengthening demand through the breakout period.

ICP technical indicator
Source: TradingView

Nonetheless, the Accumulation/Distribution indicator conveys a more cautious stance. While it has shown an upward slope, it has not yet moved into positive territory and currently sits at -44.59 million. This metric suggests that while buying activity has increased recently, it hasn’t consistently outweighed persistent selling pressure. Thus, sellers are still active, and the market has yet to fully transition into a robust accumulation phase. Until this indicator shifts decisively into positive terrain, the risk of price rejection or consolidation looms.

Market Sentiment Turns Bullish

As of January 14th, data on Community Sentiment indicated that 73.68% of participants maintained a bullish outlook on ICP. Such sentiment trends often reflect broader confidence rather than immediate capital placement.

Community Sentiment
Source: CoinMarketCap

While this positive sentiment reinforces the narrative of a breakout, it does not eliminate the technical obstacles that lie ahead. Maintaining price levels above $3.78 is crucial for proceeding toward higher resistance levels. Currently, ICP finds itself at a pivotal decision point. The breakout favors buyers, yet existing resistance and ongoing distribution may still test momentum before a sustained advance toward the $5 mark.

Final Thoughts

Key Takeaways:

The ICP token of Internet Computer has surged by 12%, indicating strong bullish momentum.
A critical resistance level exists around $3.78, with $4.34 as another potential barrier.
While buying signals are present, selling pressure has not fully subsided, suggesting caution.
Market sentiment is predominantly bullish, with a majority expecting upward movement.
The ICP token stands at a significant price juncture, balancing between bullish strength and resistance challenges.