The Internet Computer's ICP is showing clear signs of a bullish reversal after breaking above the downward trend line that had been in place for over two months, opening up a scenario for a move toward the $5 range if it overcomes the resistance levels above.
In recent weeks, ICP has risen 12% along with a $243 million increase in market cap, bringing the market cap to approximately $1.95 billion at the time of reporting. Although momentum favors buyers, supply zones around $3.78 and $4.34 USD could still disrupt the upward trend.
MAIN CONTENT
ICP broke above the downtrend line for over two months, strengthening the bullish reversal scenario.
The nearest resistance is around 3.78 USD, followed by 4.34 USD; breaking above these zones is necessary before opening the path toward 5 USD.
Cash flow improved but distribution traces remain, while community sentiment strongly leans bullish.
Technical breakout paves the way for testing the 5 USD zone
ICP has broken above the long-term downtrend line, typically an early signal of a reversal. However, price needs to be accepted above 3.78 USD and 4.34 USD before it can aim toward the trend origin zone near 5–5.30 USD.
In previous cycles, breaking the long-term downtrend line often marked a structural shift, transitioning from being 'pressed' by dynamic resistance to a state capable of forming higher lows. According to the mentioned historical price behavior, the area near 5.30 USD is a key convergence point, tied to the 'origin' of the trend line.
The liquidation heatmap shows the nearest resistance cluster concentrated around 3.78 USD. If price enters this zone, volatility may increase due to leveraged positions being triggered for liquidation, accelerating price movement in either direction depending on actual supply and demand.
Just above, the 4.34 USD zone is described as the next area where selling pressure may increase. This creates a 'layered resistance,' making a straight climb to 5 USD dependent on whether demand is strong enough to absorb supply as price successively hits each level.
The Parabolic SAR indicator places dots below the price, typically interpreted as an ongoing bullish momentum structure. As long as this SAR structure remains un-reversed, buyers still hold advantage in the short-term trend, while increasing the likelihood of price testing the 3.78 USD zone.
If you're monitoring derivatives to assess the risk of 'liquidation sweeps' as ICP approaches 3.78 USD and 4.34 USD, you can refer to perpetual contract market observation tools and BingX leverage data to gain additional insights into short-term volatility and position behavior.
Accumulation improved but distribution signals have not yet disappeared
The 20-day CMF reached 0.19, the highest level since early November, indicating improved capital inflows. However, Accumulation/Distribution remains negative at -44.59 million, implying that accumulated selling pressure over time has not been fully reversed.
Chaikin Money Flow (CMF) measures buying/selling pressure based on volume over a period. A positive CMF usually suggests buyers are dominating the volume flow, so the level of 0.19 reinforces the argument that demand is increasing during the breakout phase.
Nevertheless, the Accumulation/Distribution indicator presents a more cautious picture. The indicator has started rising but remains in the negative zone at -44.59 million, indicating that recent buying waves have not yet fully offset the prior accumulated selling pressure.
From a practical trading standpoint, this state often comes with the risk of rejection at resistance or entering a consolidation/flat phase before the trend resumes. When indicators haven't decisively turned positive, the market may remain sensitive to profit-taking at supply zones like 3.78 USD and 4.34 USD.
Market sentiment strongly leans bullish but still requires confirmation by price
Community Sentiment data shows 73.68% of participants leaned bullish toward ICP on January 14. However, sentiment primarily reflects belief; for 'confirmation', price still needs to break above and hold firmly above 3.78 USD before targeting higher levels.
According to linked Community Sentiment data, the bullish ratio reached 73.68% (see here) on January 14. In many cases, positive sentiment can support a breakout narrative, but it does not guarantee that capital flows will immediately push the price through all resistances.
Therefore, the key factor remains 'price acceptance' above 3.78 USD. If price fails to hold above this zone, a reasonable scenario could be consolidation or short-term correction before a retest, especially given that distribution traces remain visible in the cash flow indicators.
ICP is at a critical juncture: technical advantage now leans toward buyers after the breakout, but the layers of supply above and the unresolved distribution state could test momentum before a sustained upward move toward the 5 USD zone emerges.
Final Thoughts
ICP's breakout has 'reset' the short-term structure, but the next upward momentum depends on whether demand can absorb the supply above.
Momentum improvement supports buyers, yet unresolved distribution signals indicate caution is still needed.
Frequently Asked Questions
What price level is the most important short-term resistance for ICP?
The 3.78 USD zone is cited as the nearest resistance based on the liquidation map, followed by 4.34 USD. Only when price is accepted above these zones does the scenario of extending toward the 5–5.30 USD area become clearer.
What does the Parabolic SAR indicate about ICP's trend?
Parabolic SAR shows dots below the price, a structure commonly associated with sustained bullish momentum. As long as this structure holds, buyers are still considered in control of the short-term trend.
Why is CMF rising but Accumulation/Distribution still warning of risk?
The 20-day CMF at 0.19 reflects improved recent capital inflows. However, Accumulation/Distribution remains negative at -44.59 million, indicating that prior accumulated selling pressure has not been fully reversed, so the risk of rejection at resistance or consolidation remains.
Is a 73.68% bullish ratio enough to guarantee ICP will continue rising?
No. The 73.68% bullish ratio reflects community sentiment and confidence, but it does not replace technical confirmation. Price still needs to break above and hold above 3.78 USD to increase the probability of trend continuation.
Source: https://tintucbitcoin.com/icp-tang-12-nhung-gap-khang-cu-manh/
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