Internet Computer Darts Below $3 as AI Integration Hopes Meet Market Reality

Market Pulse

• After a monthly decrease of 30% ICP settled at the price of $2.97
• The story of AI advancement was not enough to protect the token from the selling pressure in the market
• The technical structure indicates that even though the price is oversold there will be a further decline in the market

Internet Computer saw a price drop of 30% this week ending up at $2.97, despite the fact that the web was full of news about its AI integration and scalability improvements. The rift between the essential changes and the price result stands for the truth that even though technological breakthroughs cannot sometimes overpower the resistance of the market. The main question that traders have to deal with is: Did ICP found support at these levels that are severely oversold, or is the dumping going to carry on to the $2.50 psychologic effect mark?

RSI Momentum Shifts Into Oversold Territory

The current daily timeframe of RSI index is 36.23, which is already in the oversold range where generally a relief bounce takes place. This is the lowest reading ever since the capitulation, which was the time when similar oversold signals were present and thus began a rapid yet temporary recovery rally. An especially impressive detail is the fast collapse of momentum – two weeks ago, RSI was resting off comfortably above 60 as AI integration news first triggered buyers’ interest.

For swing traders, this oversold RSI forms a conventional mean-reversion arrangement; however, seizing this specific falling knife necessitates a rigorous risk management plan. The weekly RSI reading of 33.04 indicates that the general trend is still badly hurt, thus, any rebounds are probably to encounter heavy resistance. Before entering trend trades, professional traders are waiting for RSI to come back above 40, since oversold can stay more oversold in the wild markets of crypto.

ADX Signals Trend Acceleration Phase

As the ADX stands at 45.99, it evidently shows that the market currently is in a strong trending – however, it is unfortunately going down for the bull traders. The high ADX level demonstrates that we have left the choppy consolidation phase and entered a clear directional move, with the sellers being in command. In essence, when ADX rises above 40 in this manner, it conveys a strong belief in the direction of the price change, as opposed to a temporary profit-taking activity.

The transformation of market structure into an apparent scene occurs by juxtaposing the present readings with the significantly range-bound action one month earlier which was characterized by the presence of ADX floating just above the 20 mark. As a result, the day traders should make changes to their planning, so they will be active when there is a trend. They will have to deal with the market differently – they will first have to sell the spikes and then buy the dips until the ADX starts decreasing from these levels which are considered as extreme. The story of the AI development that was a precursor to the prices was initially pulled down by the technical breakdown after the key levels were breached.

EMA Ribbons Paint Bearish Picture

Through the EMA ribbons, the price movement is the strongest evidence of the technical damage that has been wrought. ICP is currently far away from all important moving averages – the 10-day ($3.12), 20-day ($3.30), 50-day ($3.82), and 200-day EMA at $5.05 which is significantly essential. This complete bearish arrangement was present as the markets rejected the AI integration discussion by investing in risk-off positioned commodities throughout the whole crypto complex.

The $3.82 50-day EMA’s rejection has been the turning point, turning from the possible support to heavy resistance. This level has turned back advances on two occasions earlier in the month before finally breaking it, thus initiating the cascade we are seeing. The dissimilarity between this present value ($2.97) and the nearest EMA resistance ($3.12) is a 5% difficulty which the aggressiveness exhausted bulls must clear first just to start the technical damage repair.

Critical Support and Resistance Zones

The immediate resistance region is around the range of $3.10 to $3.25. This is where the 10-day EMA meets the recent breakdown levels and the trapped buyer inventory. Then, we have the $3.80-$3.85 zone, which strongly appears as a major resistance level, this proxy is both the 50-day EMA and the place of last December’s breakdown attempt. It is fundamental for the bulls to maintain a decent level of trading volume above $3.25 so that the bulls could even consider launching an attack on the higher levels.

Demolition of the support structure this week has made it look very unreassuring. The initial placement of the $2.90-$2.97 range, in the representation of both psychological round figures and the monthly low, is of obvious importance. In my opinion, the next prominent support level is way off at $2.50, which is also quite a coincidence as it is the month of November panic low and also it is the yearly pivot point.

The market structure’s condition has no change, and it remains firmly bearish as long as the price is below $3.25. This week’s steep decline coupled with the non-effective positive AI development news to offer at least a minor cushion, means that the sellers are firmly in the driver’s seat. The volume pattern indicates that at the levels above, there was distribution instead of accumulation.

The Path Forward

To avert the immediate selling pressure, Bulls need to commence the traditional close at above $3.25. The next step is to recapture $3.82 to throw a hint on the possible trend reversal. The AI ecosystem expansions continue to be the major drivers of the economy, but after significant downturns, it is necessary for technical repair to take a while.

The Bears are looking for $2.50 if the price does not break the resistance before that. But this is especially valid if the entire crypto market stays in risk-off mode. On the contrary, the breakdown if it happens below $2.90 with high volume would be the confirmation of the next movement lower. This kind of scenario will probably trigger stop-loss cascades toward the lows of November.

Considering the present momentum indicators and market arrangement, ICP is expected to mostly range bound in between $2.90-$3.25 in the upcoming sessions before the initiation of directional resolution. The possibility of an oversold bounce is available, yet the overhead supply and damaged technicals renew the upside potential until otherwise stated.