ICP price rises by nearly 60% after 5 days, the risk of callback increases

Internet computer (ICP) Has entered 2022.

This ICP price It rose by more than 56% in the first five days of the new year and reached a 30-day high of $38 on January 5. Its sharp rise is accompanied by a surge in trading volume, highlighting the current strong and healthy bullish sentiment.

The core of ICP’s recent price increase is a series of optimistic news.

This includes Binance’s Decide This Tuesday will list a financial instrument that enables traders to directly connect ICP with Ethereum’s native token Ether (Ethereum) and Launch of Terabethia, A cross-blockchain bridge, enabled Ethereum’s ERC-20 tokens to exist locally on the Internet computer blockchain on December 22.

In addition, a Cross-smart contract platform token assemblyEspecially in the last 7 days, it may boost the appetite of traders for ICP.

The downtrend is intact

Nevertheless, ICP still faces risks Cut recent gains It is entirely because it tends to decline within the range of its monthly decline channel.

In detail, Internet computer token The price reached the upper trend line of the channel on Wednesday, so it faces the risk of selling. This is mainly due to the trend line restricting the history of ICP upward attempts, as shown in the figure below.

At the same time, recent data also shows that the pullback from the upper trend line has pushed the ICP price to the lower trend line of the channel. For this reason, despite the bullish rebound of ICP, there is still a risk of falling to new lows.

Resistance confluence

More clues to the setting of the ICP callback come from another resistance level close to $37.70 and the risk of overestimation caused by the token’s daily relative strength index (RSI).

37.70 USD level, where Help ICP limit its bearish exposure Between September and November 2021, it coincides with the 0.236 Fibonacci line in the Fibonacci retracement chart drawn from approximately the $89 swing high to the $22 swing low.

At the same time, the RSI reading as of press time is close to 67.50. Values ​​higher than 70 will make ICP an overbought asset, which may lead to a certain degree of price correction/integration. If this happens, the ICP price may fall to the 0 Fib line near $22.

related: Dfinity insiders suspected of illegally selling ICP and harming retail investors

Conversely, closing above US$37.70 may cause Internet Computer to view US$47.50 as its next upside target.

The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.