Bitcoin (BTC) tested the $82,000 mark just hours before this article was written. The crypto market leader has maintained a steady uptrend over the past week, gaining almost 10%. This has helped boost short-term sentiment in the altcoin market.
The AI sector has been one of the best performers. AMBCrypto reported that the AI sector was pushing higher as the surrounding narrative strengthened and attracted more capital.
Internet Computer (ICP) benefited from this boost, up 21% since May 4.
Coinalyze data for ICP was also bullish in the short term. As the price approached $2.60 and was rejected, funding rates remained negative. This indicates that traders and speculators were willing to bet on short positions.
Since then, they have suffered losses as ICP has risen, reaching a local high of $2.89. At press time, its momentum looked like it could drive prices higher, but price structure can give traders and investors an important clue.
How far will ICP go?
From the formation of the range on the daily time frame, it is not much higher. Since February, ICP has failed to convincingly break the $2.8 resistance zone.
It can be argued that since the last week of February, the altcoin has reached higher lows at $2.15 and $2.32. Psychologically, this implies that buyers are willing to buy at a premium from the $2 low set in February, signaling a bullish attitude.
However, the swing structure over this period remained bearish. Traders should be wary of the $2.8-$3.0 supply zone as a bearish bastion.
The group of short liquidations of just under $3, accumulated over the past 3 months, were likely to drive ICP prices higher. At the same time, as the D1 OBV showed, no strong and sustained demand was observed during the rise from $2.
Therefore, traders should expect a liquidity sweep to the $2.8-$2.9 area and a bearish reaction. Their bias may change bullishly once the $2.9-$3.0 area moves from resistance to support.
Final Summary
- Bitcoin’s momentum and narrative strength around sectors like AI have helped ICP post substantial gains recently.
- Although the altcoin has made higher lows since late February, it needs sustained demand to move past psychological resistance at $3.
