Internet Computer (ICP): Can it Go Parabolic
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The price of Internet Computer (ICP) is reawakening, breaking above the $61 level. The newly launched asset has enjoyed rapid listing to most large exchanges, but its price has declined from the initial peak, at one point dipping under $30. The current recovery arrives alongside a BTC price hike close to $45,000, while ETH prices hold close to the $3,000 range, fueling overall market optimism.
But ICP has shown a gradual recovery in the past months, managing to double its price in the past six weeks. The more active trading volumes are boosting ICP, creating expectations the price may go parabolic and return to a higher price range.
ICP broke out in the past day, breaking above $61 before retreating to $59.92. The asset reached position 16 in terms of market capitalization, and has another shot at reclaiming a listing among the top 10 coins.
The ICP rally follows a trading slack of previously parabolic Axie Infinity (AXS), as demand shifted to new assets with a potential for outperformance at least in the short term. ICP trading is now well above $800M per day, after peaking above $1.4B at one point in the past week.
ICP Adoption is Happening
The end goal of ICP is to create an Internet Computer, a decentralized network of resources to run smart contracts and distributed apps. The approach of ICP is to demand the support of vetted hardware, ran by known network participants.
To buy the right for distributed computation, developers and startups would need to pay for “canisters” or units of data processing. Canisters are what allows records on the Internet Computer to be distributed among node.
To facilitate record-keeping, a certain amount of ICP is needed, similar to gas fees on the Ethereum network.
The DFinity team reports significant growth in network usage, based on the creation of canisters and games deployed to the network.
To boost adoption, DFinity is also offering grants of ICP so developers can access its network without the need to buy tokens on the open market. The team also noted that the current network usage is mostly to test the capabilities of the network, with no notable production apps deployed yet.
If completed, the Internet Computer protocol will be able to host apps similar to Ethereum, potentially expanding into decentralized finance, NFT, gambling apps and other forms of gamified tokenization.
Can ICP Break Out to Higher Valuations
The trajectory of ICP benefitted early adopters that bought at an ICO price of $0.03 and held onto their tokens for years. The initial sell-off for unlocked tokens erased more than 90% of ICP’s value.
But for new buyers, ICP has left some of the controversy behind, and may be ready for a breakout.
ICP is highly dependent on the Binance exchange pairing with USDT, and has exposure to US traders through Conbase. However, those pairings still have a relatively low liquidity with a high potential for slippage and volatility.
A single Binance Exchange pair for ICP/USDT carries more than 32% of all the trading volume for this asset. The pair may invite speculative traders that would boost prices in the short term, triggering a price pump.
The current price trend suggests a hike to a higher range, though with no easy prediction whether ICP can hold onto those levels.
ICP is also yet to ensure a more diverse set of trading pairs. More than 89% of all ICP liquidity is provided through Tether (USDT), the most widely distributed stablecoin.
The current breakout takes ICP closer to $70, triggering predictions that breaking those price levels may send the asset to triple-digit prices again. The expectations may work as self-fueling hype, fulfilling the expectations through rapid price action. However, ICP remains one of the more volatile projects that are subject to hype, and the trend may reverse just as quickly.
ICP Wallet Poses Difficulties
The ICP adoption plan is lagging, as the asset has a single downloadable desktop wallet. Unlike tokens on various networks, ICP has a proprietary holding mechanism, the DFinity wallet.
The ICP token is still not adopted by more widely used wallets, including hardware wallet Trezor, or the Exodus multi-asset wallet. Creating an account on ICP may pose difficulties for new users, who would prefer to use an exchange wallet for speculative trading. For now, ICP and the DFinity team have not announced work on a mobile wallet.
ICP is one of the relatively new arrivals of 2021, alongside Telcoin (TEL), Filecoin (FIL) and AXS, which reached peak valuations only to erase nearly 80% of their value soon afterward. ICP is thus positioned for potential long-term growth, while its price action may remain unpredictable and fail to hold onto higher price levels as traders lose interest.
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