Story (IP) Price Heats Up, But On-Chain Signals Hint at Weakness Behind the Rally

7h ago•

bullish:

bearish:

Story (IP) is among the standout performers in today’s market, with its price soaring nearly 10% in the past 24 hours.

Despite the price rally, on-chain indicators suggest caution, as sustained buying pressure may not fully support the surge.

Bearish Divergence Hits IP Despite Price Surge

IP’s Chaikin Money Flow (CMF), which tracks the volume-weighted inflow and outflow of capital into an asset, has steadily declined even as IP’s price continues to climb. It sits below the zero line at -0.04 at press time, forming a bearish divergence.

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IP CMF. Source: TradingView

Typically, the CMF tracks the flow of capital into an asset, so when it declines while prices rise, it suggests that the rally lacks solid support from sustained demand.

When the CMF falls while prices climb, it suggests that buying is driven more by short-term hype than by sustained investor conviction. If this continues, IP’s recent gains could be at risk.

Further, the coin’s negative funding rate lends credence to this bearish outlook. According to Coinglass data, IP’s funding rate sits below one at -0.116% as of this writing.

IP Funding Rate. Source: Coinglass

The funding rate is used in perpetual futures contracts to keep the contract price aligned with the spot price. When the rate turns negative, short traders (those betting on price declines) dominate and are paid by long traders to maintain their positions.

IP’s low funding rate highlights strong bearish sentiment in the derivatives market. Despite its rally over the past day, futures traders are positioned for a decline. This shows a lack of confidence in its mid-to-long-term prospects.

Weak Demand Threatens Near-Term Dip

With no demand backing IP’s rally, it is at risk of a significant pullback once the general market’s momentum weakens. In this scenario, the coin’s price could plunge to $5.43.