Bitcoin [BTC] tested the $82k mark just a few hours before the time of writing. The crypto market leader has held a steady bullish trend over the past week, gaining nearly 10%. This helped bolster short-term sentiment in the altcoin market.
The AI sector has been one of the stronger-performing ones. AMBCrypto reported that the AI sector was pushing higher as the surrounding narrative strengthened and drew increased capital.
Internet Computer [ICP] has benefited from this boost, rallying 21% since the 4th of May.
The Coinalyze data for ICP was also bullish in the short term. As the price approached $2.60 and faced rejection, the funding rates remained negative. This indicated that traders and speculators were willing to bet on short positions.
They have faced losses since then as ICP pushed higher, reaching a local high of $2.89. At press time, its momentum seemed like it could push prices higher, but the price structure can give traders and investors an important clue.
How much higher will ICP go?
From the range formation on the daily timeframe, not much higher. Since February, ICP has been unable to convincingly shatter the $2.8 resistance zone.
It can be argued that, since the final week of February, the altcoin has set higher lows at $2.15 and $2.32. Psychologically, this implies buyers are willing to buy at a premium compared to the $2 floor established in February, signaling a bullish attitude.
However, the swing structure on this timeframe remained bearish. Traders should beware of the $2.8-$3.0 supply zone as a bearish bastion.
The cluster of short liquidations just under $3, built up over the past 3 months, was likely to beckon ICP prices higher. At the same time, as the D1 OBV showed, heavy, sustained demand has not been seen during the move higher from $2.
Therefore, traders should anticipate a liquidity sweep of the $2.8-$2.9 area and a bearish reaction. Their bias can shift bullishly once the $2.9-$3.0 area is flipped from resistance to support.
Final Summary
- The Bitcoin momentum and narrative strength around sectors such as AI have helped ICP post substantial gains recently.
- Though the altcoin has made higher lows since late February, it needs sustained demand to break out past the $3 psychological resistance.
