Internet Computer (ICP) rose 14% at the time of publication, coinciding with the crypto market's recovery phase. However, behind the visible gains lie contradictory signals from traders that could reverse the price. According to AMBCrypto, on-chain metrics point to a strengthening foundation, but off-chain metrics tell a very different story: buyers are losing initiative and short positions are intensifying. These signals hint at a possible trend reversal in the coming days.
The on-chain growth is supported by capital inflows into the stablecoin market. DeFiLlama reports that stablecoin liquidity increased by approximately 10% over the past seven days, reaching $3.98 million at the time of publication. This inflow signals growing network capitalization, which increases demand for the native ICP token. At the same time, network fees rose to $9,210 — one of the highest levels in several months. Open interest in the perpetual futures market climbed 12%, reaching approximately $103.46 million. It would seem that all these metrics should support the price. Yet the structure of trader positions tells the opposite story.
On-chain growth is running into resistance from exchange traders who are actively opening short positions. The Open Interest-Weighted Funding Rate — an indicator that measures the balance between longs and shorts in the perpetual market — has turned negative (-0.0086%), pointing to short dominance. An even more alarming signal comes from the Taker Buy/Sell Ratio, which has dropped to 0.87: a reading below one indicates growing selling pressure and traders' assumption that the token is overvalued. The combined effect of these metrics is an increasing risk of a correction. If the Funding Rate remains negative and selling volumes continue to dominate, ICP could face significant downward pressure.
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This material is prepared for informational purposes only and does not constitute financial advice or a recommendation.