Internet Computer Falls 10% After Short Squeeze Rally — Will Bears Hold?

TLDR:

• Internet Computer fell nearly 10% after a sharp rally triggered by short liquidations faded quickly.

• Traders rushed to lock profits as momentum weakened near key resistance levels.

• Bears now aim to keep pressure on ICP while buyers search for stronger support zones.

ICP Rally Reverses as Sellers Return Fast

Internet Computer shocked traders again after giving back most of its recent gains in a sudden 10% correction. Only days earlier, ICP exploded higher after short liquidations forced bearish traders out of the market. That move created aggressive buying pressure and pushed the token through several resistance levels. The excitement did not last long.

Sellers stepped back into the market almost immediately once momentum slowed. Profit-taking accelerated near local highs, and traders who bought during the squeeze started closing positions quickly. The result? ICP lost momentum fast and dropped sharply during the latest trading session.

According to recent market data from CoinMarketCap, ICP traded near $2.63 after the decline while daily trading volume declined to $180 million. Strong volume during a sell-off usually signals intense market participation, and that can increase volatility even more.

Source: TradingView 4H ICP/USD Chart

The correction also exposed a common problem with liquidation-driven rallies. These moves often rise too quickly without building stable support zones underneath. Once buyers lose energy, sellers can push prices lower just as aggressively. Crypto traders know this pattern very well.

Analyst Warns About Weak Market Structure

Crypto analyst Abid Jaffery shared a cautious outlook after the sudden ICP reversal. In a recent X post, he warned traders against blindly chasing bullish momentum without watching overall market structure carefully. He stressed that emotional trading often leads to poor decisions during volatile market conditions.

Source: X

Jaffery explained that aggressive pump-driven rallies usually create unstable price action instead of sustainable trends. He also highlighted failed continuation setups and rejection zones as warning signs for traders. His comments now reflect the current ICP structure closely, especially after the token erased gains following the liquidation-driven breakout.

Bears Regain Technical Control

The recent correction pushed ICP back below several short-term resistance levels reclaimed during the previous rally. That move weakened bullish momentum and increased pressure on buyers attempting to defend recent gains. Sellers regained confidence quickly as the rally stalled near key rejection zones across lower and medium timeframes.

Technical indicators also cooled sharply after entering overheated territory during the short squeeze rally. The Relative Strength Index dropped as bearish momentum strengthened across the market. Derivatives activity slowed as leveraged traders reduced exposure, signaling caution among short-term participants after the failed bullish continuation attempt.

Can ICP Hold Key Support Levels?

The next trading sessions could become critical for Internet Computer as traders monitor nearby support zones closely. Buyers now need to defend important price levels and prevent another aggressive wave of selling pressure. If ICP fails to stabilize, bears may attempt deeper retracement moves toward previous consolidation areas soon.

Traders currently watch the psychological $2.40 support region very carefully. A breakdown below that level could trigger stronger bearish momentum and attract new short positions into the market. Bulls still have recovery chances if buying volume increases, though market sentiment currently remains cautious after the rapid reversal.