ICP jumped roughly 45% in one day to above $6.50 before pulling back nearly 25% and finding support around $4.77–$4.80. The move blended a technological catalyst with clear overbought signals and strong derivatives activity. The swings affected leveraged traders, short-term holders and institutional participants that increased exposure during the rally.
The initial upswing coincided with the launch of Caffeine AI, an application backed by Dfinity to generate apps from natural language, images and code, an announcement that rekindled demand for ICP, according to market coverage. On the day of the spike, trading volume rose 131% to $672 million, open interest in derivatives increased 92% to $174 million and futures volume climbed 132% to $2.18 billion, based on cited data.
Technically, ICP broke a downtrend line and reclaimed its 30-day SMA and the 200-day SMA near $4.87, while entering overbought territory as the RSI reached 79.89. RSI (relative strength index) measures price momentum and helps identify overbought or oversold conditions.
The combination of a fundamental catalyst, a technical breakout and leveraged flows favored a rapid but fragile rally, setting the stage for a swift reversal once momentum cooled.
Why is the ICP number important?
The subsequent drop—almost 25% from the peak—was driven by profit-taking and a lack of buyers above key resistances, notably the psychological barrier of $6.00 and the Fibonacci extension around $6.10. The move sketches a “Power of 3” formation—accumulation, manipulation and expansion—that some analysts interpreted as a sign of larger market players.
Leverage risk has increased, as the sharp rise in futures activity suggests a higher likelihood of liquidations during corrections. Liquidity and circulating supply remain constrained, with about half of the tokens reportedly staked for more than 12 months, according to coverage.
The next operational milestone is whether ICP holds $4.77–$4.80 or decisively reclaims the $6.00 area; both levels will serve as reference points to assess whether the recent action was a short speculative cycle or the beginning of a more stable adoption phase, according to the cited market data.
