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Internet Computer price at risk as ICP forms a double-top

Internet Computer price at risk as ICP forms a double-top

Last updated 1st Sep 2022
Disclosure

The Internet Computer price has done well in the past few weeks. ICP, its native token, is trading at $36.40, which is about 72% above the lowest level in December last year. The price is a few points below last week’s high. 

ICP defies the trend 

Internet Computer is a relatively new blockchain project that went public in May 2021 at the height of the cryptocurrency rally. The coin jumped to an all-time high shortly after it went public, pushing it to become a top 10 cryptocurrency. 

The strong performance was short-lived as the Internet Computer price declined to an all-time high during the cryptocurrency sell-off that happened between May and July last year. It has never recovered since that time although it has a market capitalization of over $7 billion. 

For starters, Internet Computer is a venture-funded blockchain project that seeks to become a leading chain for the development of projects. It is operated by Dfinity, a Swiss-based company that has received funding from the likes of Andreasen Horowitz and Polychain Capital. Its goal is to decentralize all parts of the economy such that people will have little use of centralized platforms like AWS and Azure. 

In the past few months, a number of projects have been built in Internet Computer. Some of the top projects built using Internet Computer are Fleek, DSCVR, Distrikt, and Origyn. Still, the uptake of the network has been relatively disappointing. 

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The recent rally of the ICP price is mostly because of the launch of a bridge with Ethereum. The bridge will allow ERC-20 tokens to exist natively on Internet Computer’s network. This bridge is known as Terebethia and it enables cross-chain communication, asset mirroring, and transfers between networks. 

Still, like all cryptocurrencies, the biggest risk for the Internet Computer price is the Federal Reserve. In the past few months, the Fed has hinted that it will start hiking rates this year, probably in March. Analysts believe that risky assets like ICP will struggle in a period of high-interest rates. 

Internet Computer price prediction

Internet computer price

The four-hour chart shows that the ICP price has been in a bullish trend in the past few days. The coin has managed to move above the 25-day and 50-day moving averages. The Relative Strength Index (RSI) has also been pointing upwards. 

Still, a closer look shows that it is about to form a double-top pattern whose upper part is at $37.70 and its chin is at $27. Therefore, while the bullish trend will likely continue, there is a risk that the price will suffer a pullback in the near term. The bullish view will be confirmed if the price moves above the key resistance at $40.

Crispus Nyaga

Crispus Nyaga

Crispus is a financial analyst with over 9 years in the industry. He covers cryptocurrencies, forex, equities, and commodities for some of the leading brands. He is also a passionate trader who operates his family account. Crispus lives in Nairobi with his wife and son.