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 of funding recommendation.

ICP surged by almost 30% over the day prior to this 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 prompt sturdy demand. But, the upper timeframe market construction remained bearish, regardless that the decrease timeframe construction prompt additional positive aspects towards $10.4 may happen. A bullish Bitcoin may also catalyze a transfer upward, however the weekend was approaching, which may see heightened volatility.

ICP- 2 Hour Chart

Supply: ICP/USDT on TradingView

In early Might, ICP had been steadily declining and shaped a sequence of decrease highs. Two of them are seen on the H2 chart, the $11.5 and $10.38 decrease highs. Nevertheless, 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 stage.

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

The upper timeframe bias is stronger, subsequently, if ICP rises towards the $10 space as soon as extra, it will provide a shorting alternative. A slightly large stop-loss might be set simply above the $10.5 stage.

Rationale

Supply: ICP/USDT on TradingView

The H2 RSI confirmed sturdy bullish momentum and was capable of push previous the 70 mark in current 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, however, didn’t present as sturdy a surge as the costs did. Actually, it appeared to type a decrease excessive from the 13 Might mark, which prompt {that a} pattern reversal was not in sight however slightly the downtrend may proceed.

Conclusion

Why would a dealer quick an asset that simply pumped 30% inside a day? The upper timeframe bias remained bearish and the sturdy surge took ICP proper to the doorstep of a bearish bastion. Subsequently, coming into quick positions within the $10 space may very well be worthwhile, and danger administration would stay essential.

Alternatively, the $8.8, $8.5, and $8 ranges may function help and push ICP to the $10-$10.5 space.