ICP plunged below $3 in December 2025, with intraday prints near $2,90–$2,80 and an October 2025 low of $1,98, signaling renewed downside pressure. The move shattered key supports and intensified liquidation and fear-driven flows, shaping contested price forecasts for 2026.
ICP’s drop coincided with a sharp deterioration in market sentiment. A widely cited Fear & Greed Index sank to 25, indicating extreme fear; analysts link that sentiment to waves of FUD that accelerate selling and liquidations.
Short-term positioning metrics imply elevated short exposure — one measure showed short positioning corresponding to a 39,06% MVRV footprint, which increases the risk of cascading liquidations if price momentum resumes to the downside.
Token supply dynamics are adding to the pressure. Over the prior year the protocol added more than 20 million tokens while only about 1,6 million were burned, producing net inflation that, absent stronger network usage, erodes scarcity and constrains upside for the token. Traders should view that imbalance as a structural headwind until on‑chain activity or burn rates materially improve.
Definitions: MVRV (market-value-to-realized-value) is a ratio used to assess profit/loss positions of holders; the Fear & Greed Index aggregates sentiment signals into a single gauge of market emotion.
Technicals, tokenomics and the 2026 outlook
Technically, ICP has broken multiple short-term supports and failed to clear resistances. The token slipped below support bands near $3,06 and $3,27 while rallies repeatedly stalled at roughly $3,15 and $3,55. Momentum indicators cited in market reports — including MACD and OBV — show prevailing downward pressure, with 50‑day and 200‑day moving averages aligned bearish and the RSI hovering near neutral-to-weak readings (around 41,54). Some chartists identified a descending-triangle formation, a pattern commonly associated with continuation of a downtrend when confirmed.
Despite these negatives, proponents point to ongoing ecosystem initiatives as potential catalysts. The DFINITY Foundation’s push around a Caffeine AI application was singled out as a project that could stimulate developer activity and on-chain usage; an analyst at Traders Union noted that such developments could underpin a recovery if they translate into sustained demand. The path to meaningful price recovery therefore hinges on measurable increases in network usage and materially higher burn rates.
Price scenarios for 2026 reflect a split between conservative recovery and optimistic resurgence. Conservative projections place ICP between $5,44 and $11,15 if adoption improves modestly, while more optimistic forecasts — contingent on a broader altcoin revival and widespread uptake — extend toward $31,89. Conversely, persistent low usage, continued inflationary token issuance and ongoing liquidation cycles would keep downward pressure in place.
