Internet Computer price poised for a rally if the key support level holds

• Internet Computer price is retesting its daily support at $7.86, with a potential for recovery if it holds.
• ICP’s long-to-short ratio trades above one, the highest level over a month.
• A daily candlestick close below $7.71 would invalidate the bullish thesis.

Internet Computer (ICP) is trading slightly higher on Thursday and is approaching its critical support level, indicating that a recovery could be on the cards if it holds. ICP’s long-to-short ratio trades above one suggest that more traders anticipate a rally in the asset price in the coming days.

ICP could rally if support level remains strong

Internet Computer price is retesting its daily support level at $7.86 on Thursday. This level roughly coincides with the ascending trendline (drawn by connecting multiple low levels from early July) and the 61.8% Fibonacci retracement level (drawn from the swing low of $6.26 in early August to the swing high of $10.04 at the end of September) at $7.71, making this level a key reversal zone. At the time of writing, it trades slightly above around $8.09.

If the $7.86 level holds, ICP could rally 27% from that level to retest its September 28 high of $10.04.

The Relative Strength Index (RSI) on the daily chart trades at 44, below its neutral level of 50, indicating weak momentum. For the bullish reversal, the RSI must rise from its current level to trade above its neutral level of 50.

ICP/USDT daily chart

Coinglass’s long-to-short ratio, at 1.13, is the highest level in a month, further supporting ICP’s bullish outlook. This ratio above one reflects bullish sentiment in the market, as more traders are betting on the asset price to rise.

ICP long-to-short ratio chart

Even though on-chain metrics and technical analysis support the bullish outlook, the bullish thesis would be invalidated if ICP fails to find support around $7.71 and closes below the ascending trendline. This scenario could lead to a decline in ICP’s price by 11% to retest its next daily support at $6.83.