Internet Computer (ICP) Consolidation: Calm Before Bullish Price Continuation?

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In Brief

  • ICP OI-Weighted Funding Rate indicates a stable, moderate positive interest by users.
  • ICP RSI 7D has been declining consistently for 3 weeks, indicating a healthy buying ecosystem and a possible decline in interest.
  • ICP EMA Lines formed a golden cross one week ago, and prices skyrocketed, but this pattern could be replaced soon.

The Internet Computer (ICP) price has recently drawn attention, reflecting a stable, moderate positive user interest shown by the OI-Weighted Funding Rate. Despite a consistent decline in the RSI 7D over three weeks—suggesting a vibrant buying ecosystem yet a potential drop in interest.

However, this bullish trend may soon shift. Remarkably, ICP has surged 38.68% over the past month, with an astonishing 45.60% increase in just two days. However, EMA lines could soon shift price sentiment.

RSI Has Been Declining

ICP price grew from $10.79 on March 20 to $20.59 on March 27, a 90.82% growth. It’s interesting to note that RSI 7D was around 73 and 74 during that same period.

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements, ranging from 0 to 100. Typically, an RSI above 70 indicates an asset is overbought and could be primed for a price correction, whereas an RSI below 30 suggests it is oversold and potentially undervalued.

Internet Computer (ICP) Consolidation: Calm Before Bullish Price Continuation?
ICP RSI 7D. Source: Santiment.

For Internet Computer (ICP), the RSI 7D stood around 86 in the first half of March, signaling strong buyer interest and a possible overbought condition. It then declined to 73 and is currently at 71, reflecting a consistent decrease.

This downward trend in RSI suggests that interest in ICP might be cooling off, possibly leading to a consolidation phase. A consolidation phase, characterized by reduced price volatility and tighter trading ranges, could indicate that the market is balancing out demand and supply after the recent surge, setting a potential groundwork for the next price movement direction.

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Open Interest Weighted Funding Rate Indicates Stable Interest

The ICP OI-Weighted Funding Rate has seen a significant shift from 0.003% one week ago to its current standing at 0.0483%. This metric, crucial for understanding market dynamics, represents the average cost paid by traders to hold futures positions, adjusted based on the total open interest across various exchanges.

Essentially, it reflects the market’s leverage sentiment; a higher rate indicates a bullish outlook with long positions dominating, suggesting traders are willing to pay more to maintain their bets on rising prices.

Internet Computer (ICP) Consolidation: Calm Before Bullish Price Continuation?
ICP OI-Weighted Funding Rate. Source: Coinglass.

Historically, just before the last price surge, the OI-Weighted Funding Rate for ICP was around 0.01%, a level that preceded notable price appreciation.

The recent increase to 0.0483% mirrors this trend, suggesting an intensified bullish sentiment. However, this substantial increase also brings the possibility of market saturation; as the cost to hold long positions becomes higher, the incentive for taking new long positions diminishes, potentially leading to a stabilization or consolidation of price.

ICP Price Prediction: Consolidation Before New Push?

Analyzing the ICP 4H price chart, a significant pattern emerges with the EMA (Exponential Moving Average) lines executing a ‘golden cross’ on March 23. A golden cross occurs when a shorter-term moving average crosses above a longer-term moving average. That indicates a potential bullish momentum ahead. After this cross, the ICP price indeed witnessed a sharp rise from $13.2 to $19.8 by March 27.

EMA lines are used to smooth out price data to identify the market trend more clearly. They give more weight to recent prices, making them more responsive to new information. Although the golden cross suggested an upward trend, the converging distance between the EMA lines in the last few days could point toward price consolidation.

Internet Computer (ICP) Consolidation: Calm Before Bullish Price Continuation?
ICP 4H Price Chart and EMA Lines. Source: TradingView.

This is when an asset’s price trades within a confined range as the market decides its next move, often characterized by traders taking profits and new investors entering the market at the current price levels. Hence, it suggests that the ICP price might stabilize short-term between $16 and $18.

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Looking forward, if the buying pressure is strong enough and the bullish sentiment persists, ICP might push to test the resistance at $20.99. Conversely, if the market experiences a shift in sentiment leading to a downtrend, ICP could drop to support levels of $11.5 or even further down to $10.5.

This article is sourced from the internet: Internet Computer (ICP) Consolidation: Calm Before Bullish Price Continuation?

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