Internet Computer: The correction risk rises following ICP price increases of nearly 60% in just 5 days

The token is now facing a multi-month resistance trendline.
Internet Computer (ICP), has entered 2022 with a bang. It rose by more than 56% in the first five trading days of the year and reached a 30-day high at $38 on Jan. 5. Its huge upside move was accompanied by a surge in trading volumes, underscoring a strong bullish sentiment for now. ICP/USD daily price chart. Source: TradingViewA flurry of positive news was at the heart of ICP’s recent price rise. That includes Binance’s decision this Tuesday to list a financial instrument that would enable traders to directly swap ICP to/from Ethereum’s native token Ether (ETH) and the launch of Terabethia, a cross-blockchain bridge, on Dec. 22 that enables Ethereum’s ERC-20 tokens to exist natively on the Internet Computer blockchain.Additionally, a rally across the smart contract platform tokens, especially in the last seven days, may have boosted traders’ appetite for ICP.Smart contract platform tokens’ performance. Source: MessariDowntrend intact. However, ICP is still at risk of losing its gains as it trended lower within its multi-monthly descending channel range. The Internet Computer token price reached its upper trendline on Wednesday, exposing it to selloff risks. This is due to ICP’s history of limiting its upside attempts as shown in the chart below. ICP/USD daily price chart with descending channel pattern. Source: TradingViewMeanwhile, recent data also shows that a pullback from the upper trendline pushed the ICP price towards the channel’s lower trendline. ICP was at risk of falling to new lows despite its bullish rebound. At press time, the RSI reading was at 67.50. A value above 70 will make ICP an overbought asset that may amount to a certain degree of price correction/consolidation. If this happens, ICP could fall to the 0 Fib level near $22.Related to: Dfinity insiders accused of illegally selling ICP. You should do your own research before making any investment or trading decision.

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