Internet Computer (ICP) was a top performer in the cryptocurrency market on Thursday, buoyed by a recently unveiled proposal aimed at combating inflation. Concurrently, exchange balances for the token have experienced a significant decline.
According to data from crypto.news, Internet Computer (ICP) saw a rally of 34%, reaching an intraday high of $4.78 during Thursday's Asian morning session. The token stabilized near $4.66 at the time of writing. This surge extended its weekly gains to 45% and its year-to-date profits to nearly 79%.
Beyond the initial uplift from a broader market recovery, which was supported by Bitcoin's return above key levels, the primary driver for the Internet Computer's price increase was a new whitepaper released by the DFINITY Foundation. The DFINITY Foundation is the non-profit organization responsible for the network's development.
The whitepaper, titled Mission 70, outlines a series of updates designed to reduce inflation by at least 70% by the end of the year. This reduction will be achieved through supply-side reforms, which will contribute 44% of the decrease. These reforms include reductions in voting and node rewards.
The remaining 26% of the inflation reduction target will be pursued by increasing network activity. This will be facilitated through the implementation of AI-powered on-chain cloud engines and autonomous agents.
With declining inflation, Internet Computer is anticipated to regain investor confidence and see broader utility adoption, potentially setting the stage for a sustained price recovery in the coming months.
Exchange Balances Drop Significantly
Simultaneously, data from Nansen indicates that a supply shock is already developing. The total balance of ICP tokens held across all exchanges has fallen by 63% in the past 24 hours.
These substantial outflows suggest that both large holders, referred to as whales, and retail investors are likely moving their tokens off exchanges. They are either transferring them to self-custody wallets or to long-term staking neurons. This action, in turn, is reducing short-term selling pressure on the token.
Internet Computer Price Technical Analysis
On the weekly chart, the Internet Computer price has been forming a significant bullish flag pattern. This pattern typically precedes a continuation of a bullish trend following a period of consolidation, often due to profit-taking.
Historically, when this pattern is confirmed, it has been followed by an explosive surge that mirrors the length of the initial flagpole.
For the immediate future, traders should monitor the $7.5 level as the next key target. This level is expected to act as a significant resistance point, from which a breakout of the pattern could potentially be confirmed.
A decisive breakout above this target could drive ICP prices significantly higher, potentially reaching $10 or even exceeding that level if bullish momentum persists.
Momentum indicators suggest that bulls maintain an advantage. The Supertrend indicator is flashing green, and the MACD lines have formed a bullish crossover.