ICP at the Knife-Edge: Liquidity Sweep Near $4.63 Sets Up a 24h Mean-Reversion Bounce

Executive summary

• Context: ICP exploded from the early-Nov breakout (2.94 close on Oct 31 to 8.97 high on Nov 8), then retraced deeply. The last three sessions have bled lower into a key prior demand band (4.75–5.00). On Nov 19, price swept the prior swing low (printed 4.631 intraday) but closed back near 4.96, leaving a long lower wick. Current price is 4.948.
• 24h bias: A short-term mean-reversion bounce is favored from 4.85–4.95 toward 5.20–5.35, even while the broader daily trend remains corrective/lower-high. Optimal plan: buy dips near 4.90–4.92; target 5.30±0.05.
• Invalidation for the long idea: sustained trade below 4.62 would open 4.32.

1. Price structure and trend

• Market structure (daily): Lower highs since Nov 8 (8.97 → 7.59 → 6.81 → 6.38 → 5.86 → 5.49 → 5.24) and lower lows into 4.63 on Nov 19. That’s still a corrective downtrend off the blow-off high.
• Swing-failure pattern (SFP): Nov 19’s low 4.631 undercut the Nov 16 low (4.782) and closed back above 4.90, a classical liquidity sweep. This often precedes a 1–3 day relief bounce toward the nearest supply shelf (here 5.20–5.40).
• Key levels:
  • Support: 4.75–4.85 (Sep congestion and Nov 16 close), 4.63 (Nov 19 sweep), 4.32 (Sep 22 breakdown) as deeper support.
  • Resistance: 5.20–5.37 (cluster of Nov closes/highs), 5.60 (Nov 17 high zone), then 6.00.

2. Moving averages and trend filters

• 7–10 day EMA/SMA: Approx 7D mean ≈ 5.26, 10D mean ≈ 5.60. Price 4.95 sits materially below, indicating short-term downside momentum but also mean-reversion potential to the 5.20–5.40 area.
• 20D SMA: Estimated ≈ 5.65 (skewed up by the early-Nov surge). Price is well below the 20SMA; in corrective phases, price often snaps back to the 10–20 day means on relief bounces—first magnet the 7–10 day band near 5.20–5.60.
• 50D SMA: Likely ~4.8–5.0 given the pre-pump regime. Current price is near this medium-term pivot, increasing odds of a basing/bounce attempt.
• Read-through: Despite a broader bearish drift (below 10/20), proximity to the 50D and the SFP argues for a tactical long.

3. Momentum

• RSI(14): Roughly 40. Momentum has cooled from overbought and is now in bearish-neutral territory, close to where bounces typically originate during corrections.
• Divergences: Price printed a marginal lower low (4.631 vs 4.782), while the magnitude of daily losses has been flattening since Nov 14; momentum likely formed a higher low on shorter lookbacks—supportive of a short-term bounce.
• MACD: Histogram negative after the down leg but appears to be contracting as sell-side impulse fades. Not a full bullish cross yet, but conditions are ripe for a momentum inflection on a modest up-day.
• Stochastics (qualitative): Likely near oversold and curling; tends to favor 1–3 day upside pushes.

4. Volatility and bands

• ATR(14): Elevated due to early-Nov ranges; practical daily swing potential remains ~0.4–0.8. That supports a reachable 24h move from ~4.90 to ~5.30.
• Bollinger Bands(20): Price sits near/just above the lower band after a multi-day slide; reversion toward the mid-band (currently well above price) typically starts with a push to the lower third of the channel—again 5.20–5.40 is a logical first test.

5. Volume and flows

• Volume climax: The Nov 1–8 rally and Nov 4–8 blow-off came with massive volumes; subsequent downtrend volumes remain large but have been tapering into support—classic sign of seller exhaustion.
• Nov 19 long lower wick on meaningful volume indicates responsive buying beneath 4.70.
• OBV (qualitative): Post-spike distribution faded, but recent selling hasn’t been accompanied by new volume highs—suggesting pressure is more profit-taking than aggressive fresh shorts.

6. Pattern recognition

• Falling wedge/descending channel: From the 8.97 top, ICP has been oscillating lower in a channel. The latest undercut-and-reclaim near 4.63 sits near the lower boundary, boosting the probability of a channel mean reversion.
• Candlesticks:
  • Nov 16: strong bearish day closing near low (4.78), then
  • Nov 17: bullish engulfing into 5.50, and
  • Nov 19: stop-run wick and recovery. This sequence often resolves with a test of the next supply band above.

7. Ichimoku (daily, qualitative)

• Price below Tenkan (~5.92) and Kijun (>5.5), cloud above—bearish macro signal.
• However, Tenkan and Kijun tend to act as magnets after oversold slides; the first step of such a reversion is reclaiming the 5.20–5.40 shelf.

8. Fibonacci mapping

• Leg A (Nov 8 high 8.97) to Leg B (Nov 16 low 4.78): 38.2% retrace from B is ~6.38; prior bounce topped at 5.59—weak. That said, next micro-retrace objectives on sub-swings project to 5.25–5.40 for a local relief leg.
• From the Nov 4–8 impulse, price retraced beyond 61.8%, even below 78.6% into 4.78–4.63. After such deep retracements, relief rallies often retest 38.2–50% of the most recent downswing; for the Nov 17–19 micro swing (5.50 to 4.63), that implies ~4.63 + 0.382*(0.87) ≈ 4.96 and 0.5 ≈ 5.07 already seen intraday; extension targets sit around 5.20–5.30.

9. Anchored VWAP

• AVWAP from the Nov 1 breakout likely sits well above current price (~6 area given heavy top-side prints). Price below AVWAP signals broader distribution, but distance from AVWAP plus proximity to legacy demand tends to fuel oversold bounces.

10. Wyckoff lens

• After a buying climax (BC) and automatic reaction (AR), the markdown phase has moved into a potential spring-like action (the 4.63 sweep) within a developing range (4.6–5.6). The spring and test dynamic favors a quick move back to the mid-range (5.2–5.4) if buyers hold today’s gains into Asia/Europe.

11. Support/resistance roadmap

• Immediate supports: 4.90–4.95 (intraday pivot), 4.75–4.85 (range base), 4.63 (sweep), 4.32 (major).
• Near resistances: 5.20–5.28 (shelf from Nov 14–15), 5.33–5.37 (dense supply cluster), 5.60 (Nov 17 high/EMA magnet), 6.00 round.

12. Scenario planning (next 24h)

• Bullish base case (≈60%): Early dip/retest into 4.88–4.92 gets bought; grind to 5.20–5.28, possible extension to 5.33–5.37 on momentum; close above ~5.20.
• Range chop (≈25%): 4.88–5.15 oscillation; failure to firmly break 5.20 keeps price pinned but still net positive vs entry.
• Bearish extension (≈15%): A decisive break of 4.80 and acceptance below 4.70 reopens 4.63; loss of 4.63 targets 4.45 then 4.32.

13. Trade plan (tactical)

• Bias: Countertrend long aiming for mean reversion into first supply.
• Entry: Scale 50–100% near 4.90–4.92 (current 4.95—prefer patience on a minor liquidity dip). If price accelerates without pullback, a momentum add above 5.08 is acceptable but reduces R:R.
• Take profit: 5.30–5.35 (into the supply cluster). My model TP: 5.32.
• Invalidation (stop suggestion for risk control, not part of order fields): 4.62 on a closing basis or intraday acceptance below 4.65. Risk ~0.28 from 4.90 entry; reward ~0.40 to 5.30; R ~1.4, acceptable for a high-probability mean-reversion setup.
• Add-on logic: If 5.20 reclaims with volume and holds as support, partial add targeting 5.37. If momentum stalls under 5.20, trail up and be willing to exit earlier around 5.22–5.25.

14. Why not short here?

• You would be shorting into layered support after a liquidity sweep with waning downside momentum and undercut-and-reclaim behavior—historically low edge for an entry unless 4.80 and 4.63 are lost. The better short lies on a failed rally into 5.33–5.60.

Conclusion

• Despite a bearish larger-timeframe trend off the Nov peak, multiple tools converge on a short-term bounce: SFP at 4.63, proximity to 50D region, RSI in the low 40s, contracting downside impulse, and price pressed to the lower Bollinger area. Expect a 24h move to 5.20–5.35; we target 5.32. Invalidation below 4.62 would negate.