The Internet Computer (ICP) has experienced massive network growth, thanks to the Chain Fusion interoperability protocol. Chain Fusion’s usage has increased by 1,230% year-over-year, mainly due to a surge in interest around Bitcoin DeFi. The ICP protocol activity has exploded, with a 13x increase in usage and more than a 2000% increase in messages over the past year.
The Internet Computer is a set of protocols that allows independent data centers to come together and provide a decentralized alternative to centralized cloud providers. Bitcoin-native applications, such as Rainbow Protocol, Tap Protocol, and Bitfinity, use the Internet Computer to install smart contracts and complex programs on the Bitcoin network.
This expansion of Bitcoin DeFi accelerated after the 2021 Taproot update, which spurred the development of decentralized exchanges and Bitcoin’s Layer 2 scaling capabilities. However, BTC DeFi still faces interoperability challenges. Chain Fusion allows developers to extend their applications and systems to other blockchains, specifically Bitcoin and Ethereum, with the potential to integrate Solana in the future.
Despite the renewed interest, the ICP exchange rate did not react positively to the market sentiment. The price of ICP followed broader market trends, showing a decline since the second half of 2024 after a strong performance in the first quarter. Over the past two months, ICP has remained below its 50-day exponential moving average, leading to a short-term weakening and further decline.
However, if the lower support zone is protected, the token could potentially reverse its recent losses, with a bullish breakout potentially bringing up to 18% profit.
