Internet Computer [ICP] rose 14% as the cryptocurrency market entered a recovery phase, supported by increased on-chain activity. However, emerging signals from derivatives markets and trading volume suggest selling pressure may challenge the price rally.
On-Chain Growth Signals
Stablecoin liquidity surged roughly 10% over seven days, reaching $3.98 million according to DeFiLlama data. The increase in stablecoin capital typically indicates more funds flowing into the ecosystem, which can boost utility for the native token.
Blockchain fees also climbed to $9,210, marking one of the highest levels in recent months, though remaining relatively modest compared to other networks.
Traders Shift to Short Positions
Off-chain metrics paint a different picture. The Open Interest-Weighted Funding Rate, which reflects the balance between long and short positions in perpetual markets, turned negative at -0.0086% at the time of reporting.
This shift occurred as open interest surged 12% to approximately $103.46 million, suggesting that short traders are adding positions as dominance shifts away from buyers.
Selling Volume Outpaces Buying
The Taker Buy/Sell Ratio dropped to 0.87, falling below the 1.0 threshold that indicates balanced trading. A reading below 1.0 typically signals growing selling pressure, with traders potentially viewing the asset as overvalued.
For ICP to sustain its gains, the funding rate would need to turn positive and buying volume would need to recover, otherwise downward price pressure may intensify.
