Altcoins

ICP: Despite the strong surge recently, here is why shorting could be profitable

Disclaimer: The findings of the next evaluation are the only opinions of the author and shouldn’t be thought-about funding recommendation.

ICP surged by almost 30% over the day before today however was compelled to drag again from the $9.8 resistance zone. Can bulls break this provide zone? The buying and selling quantity was excessive, which steered robust demand. Yet, the upper timeframe market construction remained bearish, despite the fact that the decrease timeframe construction steered additional positive factors towards $10.4 might happen. A bullish Bitcoin may also catalyze a transfer upward, however the weekend was approaching, which might see heightened volatility.

ICP- 2 Hour Chart

ICP unable to crack a tough resistance zone, but could see a bounce from these levels

Source: ICP/USDT on TradingView

In early May, ICP had been steadily declining and shaped a collection of decrease highs. Two of them are seen on the H2 chart, the $11.5 and $10.38 decrease highs. However, over the previous week, the worth has set larger lows from the $6.75 (dotted white) and has additionally damaged the decrease timeframe bearish construction by climbing previous the $8.9 degree.

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Putting it collectively, the inference was that ICP has a bullish outlook on the decrease timeframes till it closes a buying and selling session beneath the $7 mark. It nonetheless has a bearish bias based mostly on larger timeframe charts, which might change if the worth can power itself previous the $10.38-$10.5 zone of resistance.

The larger timeframe bias is stronger, subsequently, if ICP rises towards the $10 space as soon as extra, it will supply a shorting alternative. A quite vast stop-loss might be set simply above the $10.5 degree.

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Rationale

ICP unable to crack a tough resistance zone, but could see a bounce from these levels

Source: ICP/USDT on TradingView

The H2 RSI confirmed robust bullish momentum and was capable of push previous the 70 mark in latest hours. The Stochastic RSI shaped a bearish crossover in overbought territory, which meant that the RSI and the worth had some room to fall decrease. The momentum would stay in favor of the bulls so long as the RSI doesn’t flip impartial 50 to resistance.

The A/D, alternatively, didn’t present as robust a surge as the costs did. In reality, it appeared to kind a decrease excessive from the 13 May mark, which steered {that a} pattern reversal was not in sight however quite the downtrend might proceed.

Conclusion

Why would a dealer quick an asset that simply pumped 30% inside a day? The larger timeframe bias remained bearish and the robust surge took ICP proper to the doorstep of a bearish bastion. Therefore, coming into quick positions within the $10 space might be worthwhile, and threat administration would stay essential.

On the opposite hand, the $8.8, $8.5, and $8 ranges might function help and push ICP to the $10-$10.5 space.

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