Story [IP] falls 10% in 24 hours – But this dip might be temporary

Market overview

Story Protocol’s IP token slipped about 10% in the last day as broader crypto risk appetite cooled and intraday volatility picked up across mid-cap assets. The drawdown came amid a quick rotation out of momentum plays, pushing IP into a swift retest of recently established support zones.

Despite the sharp move lower, the selloff looks more like a momentum reset than a structural breakdown. Intraday volume skewed toward market sells during the decline, but spot depth stabilized into the close, suggesting that dip buyers stepped in near local support. For a relatively newly listed asset with accelerating community attention, these fast expansions and contractions in range are common as liquidity providers reprice risk.

Derivatives point to a potential bounce

Futures data adds a constructive wrinkle. Open interest held steady to slightly higher through the dip, implying traders kept risk on rather than exiting en masse. When price falls while open interest is resilient, it often indicates positioning is rotating rather than capitulating.

Funding rates hovered around neutral and then nudged positive on several venues as the session progressed, a sign that long interest returned after the initial flush. At the same time, the long/short ratio recovered from the morning sell pressure, and liquidations skewed toward longs early before short liquidations began to edge higher during the bounce attempts. That shift in liquidation profile can create the conditions for a relief move if shorts start crowding late.

Taken together, the derivatives backdrop looks more corrective than trend-ending: steady open interest, funding stabilizing near neutral-to-positive, and an improving long/short skew typically align with post-dip basing attempts.

Retail flows and on-chain signals

On the spot and on-chain side, retail participation appears to be increasing rather than retreating. Smaller transactions as a share of volume rose into the dip, and address activity stayed elevated, consistent with bottom-fishing behavior. Exchange flows also looked mixed-to-supportive, with inflows slowing after the initial sell wave and outflows picking up as price stabilized.

For a token centered on intellectual property licensing and creator ecosystems, network buzz tends to translate into swift shifts in retail flows. The ongoing engagement from smaller wallets, alongside steady community chatter, suggests interest remains intact even as price retraced.

Technical context

From a market structure perspective, IP’s drop carried price back into a prior breakout region where buyers have previously defended. Momentum indicators on lower timeframes show early signs of stabilization, with a modest bullish divergence forming as price made a marginal lower low while momentum softened its downside impulse.

Key observations traders are watching now include:

• Whether price can hold the recent breakout-retest area on closing bases.
• A reclaim of short-term moving averages on 1H–4H timeframes to reassert bullish structure.
• Continuation of neutral-to-positive funding with rising spot bid, signaling organic demand rather than purely leveraged flow.

What could confirm a reversal

• Derivatives: Sustained open interest with modestly positive funding and increasing basis, without a surge in forced liquidations.
• Spot: Higher lows on intraday charts accompanied by expanding buy-side volume and tightening spreads.
• On-chain: Continued growth in active addresses and a tilt toward exchange outflows after stabilization.

Risks and invalidation

• If funding flips persistently negative with open interest rising into lower prices, it would signal a heavy short bias and increase the risk of trend continuation down.
• A spike in exchange inflows from larger holders would increase near-term supply overhang and weaken the dip-buying thesis.
• Failure to defend the recent breakout-retest area on closing bases would undermine the constructive setup and open the door to a deeper retrace.

Bottom line

IP’s 24-hour decline was sharp, but the combination of resilient open interest, stabilizing funding, and sticky retail participation suggests the drop may be corrective. If buyers continue to defend the retest area and spot demand firms, the stage is set for a relief bounce. Until then, volatility remains elevated, and disciplined risk management is essential.