The crypto asset ICP is facing a critical support level as its price has dropped over 32% in the past month due to bearish momentum. Internet Computer (ICP) is currently ranked 19th by market cap at $5.83 billion. As of writing, it is trading at $12.59, which is down 1.28% in the previous 24 hours and over 14% over the last seven days.
Despite the recent downturn, the project has announced significant upgrades and integrations to establish ICP as the “Layer Zero for Bitcoin” and enable decentralized finance (DeFi) applications built around Bitcoin’s blockchain. A few days ago, the Internet Computer activated an upgrade designed to allow ICP intelligent contracts to interact with Ordinals and BRC-20 tokens inscribed on the Bitcoin blockchain.
OmnityNetwork has recently integrated with ICP’s cross-chain “Chain Fusion” technology. This integration has enabled users to trade Ordinal-inscribed Rune tokens on ICP without paying any gas fees. Furthermore, it prevents these trades from clogging Bitcoin’s network. As a result, Dfinity can use ICP as a scalable base layer to expand Bitcoin’s limited programmability.
What does ICP mean on the internet?
Definition
Internet Computer (ICP) is a set of protocols that enables decentralized data centers to collaborate, offering an alternative to current cloud providers. The ICP token is used for governance (voting on network’s future), rewarding participants for good behavior, and paying transaction fees.
The Internet Computer is a project aiming to create a decentralized Internet by using independent data centres as an alternative to corporate cloud services. Unlike many other projects in the cryptocurrency space, the Internet Computer Protocol (ICP) is not just a form of digital money. The ICP token, which can be purchased and traded via exchanges like Coinbase, is just one part of a much bigger idea.
ICP’s basic idea is to create a new kind of decentralized internet and global computing system — where independent data centres all over the world could join together to create an alternative to current cloud services (such as Amazon Web Services and Google Cloud) powering most of the internet. ICP plans to have the protocol running on millions of computers worldwide.
According to ICP developers, the network that they have created has several crucial advantages over centralized alternatives. For one, it operates via open standards and avoids conflicts of interest when a primary cloud-computing provider hosts products that compete with its services.
Originally named DFINITY, ICP’s global and distributed network of data centres can run all applications accessible via traditional Internet standards such as DNS (the domain name system, which you use through web browsers and smartphones).
The ICP token has several primary uses: it acts as a governance token (allowing holders to “lock” some of their ICP into the network in exchange for having a say in the future development of the ICP protocol), is rewarded by the network to participating data centres for good behaviour, and is used to pay transaction fees on the network.
Who originally developed the Internet Computer?
The Internet Computer was created by Dominic Williams in 2016 and was developed by the DFINITY Foundation, a non-profit organization that focuses on researching and building the Internet Computer. After years of research, the Internet Computer was officially launched in May 2021. Researchers all over the world contribute to the foundations’ work — including cryptographers who hold around 100,000 academic citations and 200 patents.
How does ICP work?
The Internet today is highly centralized. Popular applications on the web are often closed-source, proprietary, and hosted on a handful of data centres owned by big tech firms. One critical data centre failing can cause huge swathes of the web to shut down. Another major concern (particularly for privacy advocates) is that centralized, corporate web service providers have the ability to censor or deplatform applications.
The Internet Computer attempts to offer a fundamental alternative so that developers can build, host, and serve applications in a more decentralized way — allowing websites to be deployed directly onto the public internet. Further, the Internet Computer would incentivize open source and transparent software development.
As explained in the MIT Technology Review’s profile of the Internet Computer: “Instead of running on a dedicated server in Google Cloud, for example, the software would have no fixed physical address, moving between servers owned by independent data centres around the world.”
ICP allows developers to convert crypto into processing power by establishing a fee based on the required computing power. As long as the fee is paid, the website will run on the public internet.
The Internet Computer has the capability to create and operate any type of application. This includes social networks akin to LinkedIn and TikTok, conventional software like the ones you’re familiar with, and novel applications that haven’t been thought of yet. As a demonstration, ICP developers have published open-source code for CanCan, which they describe as a “decentralized TikTok.”
ICP Technical Analysis
Since hitting a high of $20.90 on March 27th, the Internet Computer token has been experiencing intense bearish momentum on the technical analysis front. ICP appears to be on the verge of retesting crucial support levels after being rejected multiple times at the ascending trendline support around $11 and the neckline of a head-and-shoulders pattern at the $10 zone.
ICP has been forming a “head-and-shoulder pattern” reversal pattern since late January 2024. The right shoulder is at the $16.40 area, after the head at $20.90. The price of ICP has been finding support from the ascending trendline since December 20th, and it is expected to test it again soon. Can it continue to avoid further drops as it has in the past?
Today, the ICP stock opened at $12.860 and has been fluctuating between its high of $13.086 and its low of $12.138. If the stock successfully retests its ascending trendline or neckline support, it could lead to bullish activity and a potential rise toward the recent highs of $16.40 and $20.90. However, if the stock breaks below these critical levels, it could result in further downside movement towards $10 or even lower.
On the 4-hour chart, the price of ICP cryptocurrency fluctuates between the levels of $12 and $13. The Relative Strength Index (RSI) is currently at 38, which is approaching the oversold territory. If the RSI reading falls into the oversold zone while ICP tests the support level, it could signify a chance to buy.
ICP Analyst Predictions
According to analysts, ICP’s projection is varied. Bitnation is optimistic, forecasting ICP to reach $49.94 by the close of 2024, while PricePrediction.net predicts ICP trading between $25.14 and $29.68 in 2025.
As the Internet Computer continues its blockchain upgrade push and DeFi integrations, ICP can find solid support and resume its uptrend. The following weeks could be crucial in deciding the short-term price trend of ICP.
What risks might the Internet Computer face?
Participation in the Internet Computer may require more robust hardware than traditional blockchain projects, potentially limiting the number of participants. This could threaten its decentralization ethos. If the hardware requirements are too large, only large and well-capitalized players would be able to set up data centres and participate.
Additionally, in a network that is genuinely decentralized, it becomes difficult to identify the party responsible for hosting abusive content. The current internet infrastructure is controlled by corporations who exercise some level of moderation. However, the downside is that these corporations can terminate the presence of any individual or entity on their platform without any explanation. Ideally, Internet Computers (and other crypto protocols) can create solutions that allow decentralized governance to moderate these difficult questions.
Internet Computer isn’t the only protocol aiming to reinvent the Internet. Other potential competitors include IPFS/Filecoin and MIT’s Solid (which was created by web pioneer Tim Berners-Lee).