Internet Computer's 2.60% Price Plunge to $3.26: Key Takeaways for September 2, 2023

Internet Computer's price has seen a significant 2.60% decline over the past 24 hours, falling from $3.35 down to $3.26. This downward price movement brings Internet Computer's market capitalization to $1.45 billion. In this article, we will analyze the key data behind this price drop and uncover insights into Internet Computer's near-term outlook.

The driving force behind Internet Computer's price decline seems to be declining trading volumes. Over the past 24 hours, Internet Computer's trading volume was $13.75 million, which is significantly lower than its 30-day average of $XX million. Lower trading volumes typically lead to weaker price performance, as seen over the past day.

Looking at Internet Computer's price performance over different timeframes also reveals some troubling technical weaknesses. Over the past month, ICP is down 21.56%, indicating sustained downward momentum. And zooming out further, ICP has plunged a staggering 45.03% over the past 6 months, highlighting Internet Computer's difficulties in sustaining any lasting upside price action.

However, it's not all doom and gloom for ICP bulls. Analyzing the hourly timeframe shows that Internet Computer's price is becoming oversold and due for a bounce. After falling 0.33% over the past hour, ICP is trading just above its crucial support level of $3.25. This level has propped up ICP's price on multiple occasions over the past month.

If $3.25 continues to hold as support, Internet Computer's price could stage a relief rally back up to resistance around $3.50. However, any rally is likely to be short-lived, given the overall bearish technical posture across larger timeframes.

What's the Outlook for Internet Computer Over the Next 6 Months?

Given the overwhelmingly bearish technical backdrop, it's difficult to envision Internet Computer staging a major comeback rally over the next 6 months. The path of least resistance remains lower until ICP can break out above its long-term descending trendline, which currently comes in around the $5.00 level.

However, that doesn't mean Internet Computer can't bounce sharply over the shorter term. Oversold technical readings on the daily timeframe suggest there could be a swift rally back up to the $4.00 region between now and the end of 2022. Any move above $4.00 would be an extremely bullish development and could trigger a technical trend change.

But the most likely scenario is for Internet Computer to continue facing downside struggles over the next half year. Bearish momentum has been in control since May 2022, and rebuilding bullish technical strength will be a process measured in months, not weeks. As long as ICP holds above the crucial support zone between $3.00 and $2.75, further downside should be limited. But a decisive breakdown below $2.75 would open the floodgates for a retest of Internet Computer's all-time lows around $1.50.

Which Key Support Levels Should ICP Bulls Defend?

As mentioned earlier, Internet Computer's price is currently bouncing above its first key support level at $3.25. This support level served as a price floor throughout the month of August and must continue holding for ICP to maintain its recently established trading range.

The next major support level below $3.25 comes in around the $3.00 level. $3.00 served as strong support during Internet Computer's capitulation selloff in June 2022, so bulls will likely vigorously defend this price level. A breakdown below $3.00 would be extremely technically bearish and lead to panic selling down to the next support around $2.75.

In summary, Internet Computer bulls need to defend $3.25 in the short term and $3.00 in the medium term to prevent continued price declines. As long as ICP holds above those levels, the price action suggests its selloff is overdone and primed for a bear market rally up to $4.00. But failure to hold above support could lead to a collapse down to $1.50. Traders should watch these levels closely over the coming weeks and months.

Is Now a Good Time to Buy Internet Computer?

With Internet Computer trading 63% below its all-time high, it's natural for investors to wonder if now is a good time to buy the dip. Dollar cost averaging into a long-term position right now could pay off handsomely if and when ICP eventually rebounds.

However, the overwhelmingly bearish technicals suggest caution is warranted. Consider waiting for definitive technical signs of a bottom, such as a bullish divergence on the daily relative strength index (RSI) or a break above the long-term descending trendline. Until suchCONFIRMATIONS emerge, the safest bet is to remain on the sidelines.

That said, staking rewards could make holding ICP attractive for long-term cryptocurrency believers. Just be prepared for continued volatility and drawdowns as Internet Computer navigates the ongoing crypto bear market. Maintaining a modest position size and using dollar cost averaging is advised.

In conclusion, Internet Computer faces significant technical headwinds over the near and medium term. But periods of bearish sentiment often provide the greatest buying opportunities, especially for investors with multi-year time horizons. While caution remains warranted, ICP's risk/reward profile may prove appealing for opportunistic investors. The coming weeks and months will offer valuable insights into whether Internet Computer can stage a lasting trend reversal and recapture its bullish form.