TL;DR
- Internet Computer (ICP) regained strong traction after reaching a three-month high, fueled by rising interest in AI-linked crypto projects.
- The surge accelerated due to short liquidations, which intensified buying pressure.
- With the price at $7.94, a 24-hour jump of 30.8%, and a market cap of $4.3B, ICP is once again seen as a high-potential AI blockchain contender drawing renewed market attention.
Internet Computer (ICP) has staged an impressive rebound in recent weeks, climbing from late-October lows and capturing stronger market interest. After falling to $2.92 at the end of October, the token surged to $7.94, signaling a notable shift in sentiment. Over the last three months, ICP is up by approximately 51%, supported by improving confidence in digital assets that integrate blockchain with artificial intelligence. This move highlights a growing appetite for platforms offering performance, decentralization, and advanced on-chain computation suitable for AI-driven applications.
Although ICP remains below the yearly high above $15, the recent upswing suggests a potential turnaround in investor perception. The broader AI crypto sector now surpasses $27B in valuation, reflecting increased demand for projects delivering AI-powered tools and decentralized infrastructure. Internet Computer aims to strengthen its position as a developer-friendly ecosystem, offering scalable smart contracts, on-chain storage, and cost-efficient architecture for building AI-enhanced applications.
Derivatives Activity Sparks Fresh Momentum
A key driver behind ICP’s rally has been the rapid rise in derivatives trading. Open interest climbed to $162M, boosting liquidity and enabling sharper price movements. Binance remains the dominant venue for ICP, attracting a large share of leveraged trades. The increased volume allowed traders to build more aggressive positions, resulting in stronger participation and accelerated momentum during the rally.
The network currently holds around $23M in locked liquidity and maintains moderate adoption in app development. However, the recent surge has renewed expectations that Internet Computer could draw developers back, especially as demand grows for blockchain platforms capable of executing AI models directly on-chain.
Short Squeeze Adds Fuel To The Rally
The latest rally was intensified by a short squeeze, adding significant upside pressure. Roughly $5M in short positions were liquidated within 24 hours, forcing traders to buy back and accelerating gains. Only about 30% of current positions remain short, signaling a clear decline in bearish conviction.
Negative funding continued throughout the climb, discouraging short sellers from holding extended exposure. With much of the short liquidity already absorbed, analysts see room for continued upside, referencing similar cases where rallies extended after large squeezes.
