ICP Surges 10% as Technical Breakout Confirms Reversal

• ICP surged 10.59% to $3, testing key resistance amid broader market declines.
• The breakout above $2.85 confirmed a bullish reversal from a descending triangle pattern.
• Market sentiment remains fearful with ICP's Fear & Greed Index at 21 despite gains.
• Key resistance levels cluster at $2.93-$3.016, with $2.85 acting as new support.

Internet Computer (ICP) defied broader crypto market weakness with a 10.59% surge to $3, bucking the downward trend that saw Bitcoin and Ethereum decline. This rally followed a confirmed technical breakout above the critical $2.85 resistance level, signaling a potential trend reversal. The move comes amid extreme market fear and thin holiday liquidity that recently triggered a $66 million liquidation event across cryptocurrencies. Traders are now watching whether ICP can sustain momentum above key technical levels.

What Drove ICP's Double-Digit Price Surge?

ICP's rally originated from a bullish engulfing pattern near the $2.68 support level, indicating strong buyer conviction. The subsequent breakout above $2.85 confirmed a medium-term reversal from a descending triangle formation, a technically significant development. Trading volume surged notably between 03:00-05:00 ET and again at 15:00-16:00 ET, coinciding with the price breakthrough key barriers. This divergence from the broader market downturn, where Bitcoin spot ETFs saw $589 million in weekly outflows, highlights ICP's independent momentum.

Technical indicators reinforced the bullish move as the 50-period moving average crossed above the 20-period MA, forming a golden cross pattern. MACD turned positive in early January 1st trading hours, showing strengthening upward momentum. That said, the rally occurred against a challenging backdrop of extreme market fear, with the overall crypto Fear & Greed Index at 22. ICP's ability to rally despite these headwinds suggests token-specific technical drivers overpowered negative sentiment.

Which Technical Signals Are Flashing for Internet Computer?

The $2.85 level has flipped from resistance to support, creating a new technical floor for ICP. Immediate resistance now clusters between the 50% Fibonacci level at $2.93 and the swing high of $3.016. A decisive break above $3.016 could open the path toward $3.05, though RSI readings above 70 indicate potential short-term overbought conditions. Bollinger Band expansion between $2.70-$2.90 reflects increased volatility during the breakout phase.

Market structure suggests possible consolidation near $3.01 or a pullback to test the $2.90 level as new support. The 61.8% Fibonacci retracement level at $2.97 presents another key resistance barrier. Traders should monitor for closes below $2.90, which would signal weakening momentum and potential retests of lower support. Volume patterns show no major divergence from price action, supporting the rally's validity despite the Altcoin Season Index reading a neutral 37.

Can ICP Overcome Market Fear to Sustain Gains?

ICP faces significant sentiment headwinds despite technical strength, with its Fear & Greed Index reading 21 indicating extreme fear. The token's 30-day volatility of 8.47% reflects ongoing market instability that could challenge sustained gains. Broader market conditions remain fragile following the Christmas Eve flash crash that liquidated $66 million in long positions amid thin liquidity. These factors create persistent downside risk even after ICP's impressive rally.

Longer-term projections suggest potential growth, with analysts previously forecasting a $7.77 maximum price for 2025. By 2031, some models project ICP could reach $22.81 based on expanding developer adoption. The Relative Strength Index reading of 37.38 places ICP in neutral territory, leaving room for movement in either direction. Current price action near $3 remains well below historical projections, requiring sustained buying pressure to validate bullish technicals against fearful market psychology.