Here’s why CPI could rise 27%

• The price of internet computers is testing its daily support at $7.86 with a potential recovery if it holds.
• ICP’s long-short ratio is trading above one, a one-month high.
• A daily candle close below $7.71 would invalidate the bullish thesis.

Internet Computer (ICP) is trading slightly higher on Thursday and nearing the critical support level, indicating that a recovery could be on the cards if it holds. The long-short ICP ratio above one suggests that more traders are anticipating a rise in the asset price in the coming days.

ICP could rise if the support level remains strong

Internet Computer price retests its daily support level at $7.86 on Thursday. This level roughly coincides with the uptrend line (drawn by connecting several early July lows) and the 61.8% Fibonacci retracement level (drawn from the swing low of $6.26 in early August to swing high of $10.04 at the end of September) to $7.71, making this level a key reversal area. At the time of writing, it is trading slightly above around $8.09.

If the $7.86 level holds, ICP could rise 27% from that level to retest the September 28 high of $10.04.

The Relative Strength Index (RSI) on the daily chart is trading at 44, below its neutral level of 50, indicating weak momentum. For the bullish reversal, the RSI must rise from the current level to trade above its neutral level of 50.

Daily ICP/USDT Chart

Coinglass’ long-short ratio at 1.13 is a one-month high, further supporting ICP’s bullish outlook. This over-one ratio reflects bullish sentiment in the market as more traders are betting on asset price growth.

Long-short ICP ratio chart

Even though chain metrics and technical analysis support the bullish outlook, the bullish thesis would be invalidated if the ICP fails to find support around $7.71 and closes below the uptrend line. This scenario could see ICP price drop 11% to retest the next daily support at $6.83.