The native token for the Layer-1 blockchain Story, Ip, is making headlines today as it defies the recent market crash. In a rather surprising development, IP is up by over 4% on the day. This surge comes amid a market lull that has left altcoins in red as the Iran vs Israel war escalates further with the U.S entering the war. 

However, despite the resilience depicted by IP, on-chain metrics suggest that the rally could only be a ‘dead cat bounce.’ Particularly, there is an increase in short interest from investors hinting that the rally may not hold.  

IP Rallies Over 4%, But Momentum May not Hold

Coming in at position #75 based on market cap ranking, Story (IP) is putting up an impressive performance on the day. As per data by CoinMarketCap, the token is up by 4.38% over the last 24 hours pushing IP to $2.75. This is the highest surge recorded across the top 100 coins. In fact, other altcoins including Ethereum, ADA, Sui, as well as peer AI tokens are in turmoil. 

Nonetheless, while the IP token is putting up a show, the trading volume shows lesser trading activity. Story has only managed $26.95 million in trading volume over the last 24 hours, marking a 19.59% drop. This means that the current rally is weakening as stronger market conviction for buyers. 

In the same line, on-chain metrics show that IP derivative traders are not convinced that the token will continue to rise. Rather, these traders are positioning for a price drop despite the current price resilience. 

Data by Coinglass shows that IP’s funding rate is plunging. As of this writing, the OI-Weighted Funding Rate for IP is down by -0.08%. While the current level is above the -0.62% recorded two days ago, traders lack conviction in the token’s upward price movement. 

In the crypto market, funding rate usually depicts periodic payment between long and short positions for perpetual futures traders. A positive reading usually means that long positions dominate the market, meaning a stronger bet for an upward price rally. 

On the other hand, a negative reading, like the current IP funding rate, shows that shorts dominate. This signals that traders are expecting the price to drop, thus are betting against the current rally. 

What’s Next for the Story (IP) Token? 

Despite traders showing lack of conviction, IP’s technical indicators point to a short term bullish momentum. For instance, the 4-hour chart on TradingView shows that the Relative Strength Index (RSI) of IP is recovering from oversold levels. The RSI currently has a reading of 45.84 climbing from 39.82 over the last 4 hours and from below 30 on June 19. This surge shows that bullish momentum is slowly returning. 

However, the RSI is still below the neutral line at 50. It must thus cross above this level and surge towards 60 to confirm bullish momentum in the market. Such a case would mean higher prices for IP, potentially pushing it above $3.0. In case the RSI faces a reversal, Story‘s IP token could retrace towards the $2.50 region support established recently.