Story Protocol sheds 18% – THESE clusters warn of deeper IP pullback

Investors’ next move remains pivotal for the intellectual property token, Story Protocol [IP], as it will likely determine whether the price finds stability or slides further into decline.

On-chain data and market indicators paint a clear picture of broad bearish sentiment. The longer-term price structure continues to reflect lower highs and lower lows, reinforcing a downtrend that remains firmly intact.

Activity across both spot and perpetual markets mirrors this outlook.

At this stage, the market’s only realistic chance at a rebound hinges on a critical support zone, which will largely dictate near-term price direction.

Capital flows reinforce the bearish bias

Perpetual market positioning has been dominated by sustained liquidity outflows and a steady rise in short exposure—two defining features of a bearish market environment.

Price action has closely followed this trend. Over the past 24 hours, IP posted one of its sharpest declines, shedding approximately 18% of its value.

During this period, roughly $17 million exited the IP perpetual market, dragging total open liquidity down to $68.93 million.

Outflows of this scale typically reflect a combination of entrenched bearish conviction and investor capitulation, as traders rush to exit positions amid accelerating downside pressure.

This dynamic culminated in a liquidation cascade that pushed total liquidations on Story Protocol to about $1.19 million, with long positions absorbing the majority of the losses.

The Funding Rate adds further confirmation to this bearish setup. Despite thinning liquidity, the traders that remain are increasingly skewed short, with short contracts dominance now outweighing long positions at the time of this report.

A negative Funding Rate underscores this imbalance.

When funding turns negative, it indicates that short traders are paying a premium to maintain positions, often signaling expectations of continued downside momentum.

The spot market offers little relief. Over the past nine days, buying activity has fallen to its weakest level, with just $542,000 deployed by IP investors.

This muted demand highlights the lack of conviction among Spot buyers.

With limited spot inflows to absorb selling pressure and bearish positioning dominating derivatives markets, downside risks remain elevated.

Support levels under pressure

IP traded at a technically fragile level, hovering close to its all-time low of $1, first set in February 2025.

As of press time, price was confined within a broader support range between $1.7 and $1.0—a zone that has historically acted as a reversion area.

Within this band, IP has already slipped to the mid-range support near $1.4, placing the asset in an increasingly vulnerable position.

A failure to hold this mid-range level would likely confirm a broader bearish continuation, signaling insufficient buy-side demand to stabilize the price.

In a more constructive scenario, price could establish a short-term range, oscillating between the mid-range support and the upper boundary of the zone, before making a more decisive move.

For now, however, weak spot participation and persistent bearish dominance suggest the probability of a sustained rally remains limited. Instead, IP risks slipping below the mid-range level, retesting its all-time low, and potentially setting a new one.

Is a rebound still possible?

Liquidity analysis provided further insight into potential price paths.

At present, traders concentrate liquidity between the mid-range support and the upper boundary near $1.7.

This distribution suggests that a rebound remains technically possible, with price potentially rotating within this range.

However, if buying momentum fails to hold up as price moves toward the upper liquidity zone, downside risks increase.

Traders have also stacked liquidity below the mid-range support, creating room for a deeper pullback if sellers regain control.

Final Thoughts

• IP is recording steady capital erosion in the spot market, while perpetual traders remain firmly bearish.
• Story (IP) is now just one key support level away from retesting its all-time low of $1, with growing odds of setting a new lower low.