Although the broader cryptocurrency market showed mixed performance, Internet Computer (ICP) experienced a notable surge, roughly doubling in value over a single week to trade in the $6.12–$6.89 range. The move represented about a 100% one-week gain and placed ICP among the top gainers by market capitalization, driven in part by a 27% one-day increase at its peak, and it pushed market capitalization above $3.1 billion while daily spot trading volume approached $720 million. Such concentrated activity coincided with open interest rising to levels not seen since September 2021, indicating a marked uptick in investor engagement across derivatives and spot markets.
The most cited catalyst for the rally was the launch of Caffeine, an on-chain AI platform released by the DFINITY Foundation, which allows developers to build decentralized applications from image, code, and text prompts without conventional coding, and because it runs fully on-chain it contrasts with cloud-based AI services, reinforcing a decentralization and security narrative. Caffeine’s design uses ICP “cycles” as gas, so every application execution consumes cycles that are effectively removed from circulation, creating deflationary pressure on the token supply, an economic mechanism that attracted attention amid the blockchain-plus-AI thematic rotation. Observers noted that the platform’s compatibility with AI workflows and the promise of developer-friendly tooling aligned with broader investor interest in AI infrastructure built on blockchain primitives. Caffeine launched November 6, which gave the market a concrete product narrative tied to the blockchain+AI thesis. Spot BTC ETFs recorded outflows
Supply-side dynamics reinforced the momentum, as exchange reserves of ICP declined by roughly 31.4% over 30 days while the top 100 wallets increased holdings by nearly 30%, a pattern consistent with reduced sell-side liquidity and accumulation by larger holders, and such supply shocks often precede amplified price moves when demand increases. Network fundamentals provided supporting context, with ICP’s canister-based architecture enabling fully on-chain apps and over 262 billion processed transactions since the token generation event, metrics that proponents cite when arguing for sustainable utility beyond speculative narratives. Market participants and analysts caution that although on-chain and technical indicators favor continued strength, reduced exchange liquidity, concentrated whale holdings, and broader market volatility introduce downside risk, so disciplined risk management remains advisable.
