Story Protocol’s native token [IP] has been caught in a whirlwind of volatility, reflecting broader instability across the cryptocurrency market. After experiencing a steep 27% drop since June 11, IP showed signs of a short-term recovery, bouncing back by nearly 13% over the past few days. While this rebound may seem encouraging on the surface, a deeper dive into technical indicators and market dynamics suggests that the price action is far from a confirmed reversal. In fact, mounting bearish divergences signal that the recent uptick might merely be a temporary relief rally before another leg down.

The backdrop to this price behavior is one of heightened uncertainty, fueled by Bitcoin’s erratic moves and external macroeconomic pressures. As is often the case, Bitcoin’s turbulence has rippled across the altcoin space, dragging many lower-cap tokens like IP along with it. Although IP’s bounce offers a glimmer of hope to investors, the broader trend remains clearly bearish. At the time of writing, the daily market structure shows no signs of a confirmed shift to bullish territory.

Looking at historical price movements, IP bulls attempted to initiate an uptrend back in May, temporarily gaining control and pushing the token above its key moving averages. However, this attempt was short-lived. By late May, sellers had regained momentum, reversing the structure and driving the price downward once more. The most recent bounce, while noteworthy, has yet to break through significant resistance levels that would confirm a sustainable recovery.

Technical analysis points to several key resistance zones that traders should monitor closely. Based on a Fibonacci retracement drawn from the recent high to the June low, the $3.41, $3.61, and $3.89 levels emerge as critical hurdles. These levels correspond to the 50%, 61.8%, and 78.6% retracement marks, and they are expected to act as strong resistance unless bulls can generate enough momentum to break through. Of particular interest is the $3.41 level, which aligns with an area of increased liquidity and past price interaction. A rejection at this point could open the door to renewed selling pressure.

Volume and momentum indicators are also painting a mixed picture. The On-Balance Volume (OBV) has shown a steady climb over the past week, suggesting that some accumulation is taking place. This could be interpreted as a sign of underlying bullish interest. However, the Awesome Oscillator (AO), which measures market momentum, remains firmly in bearish territory. This divergence between volume and momentum implies that while buying activity is present, it may not be strong enough to overcome existing downward pressure.

Adding another layer to the analysis is the liquidation heatmap from Coinglass, which reveals critical liquidity zones that could influence near-term price action. According to the heatmap’s one-month lookback, areas around $3.2–$3.3 and $2.4 are emerging as major liquidity targets. Price often gravitates toward such zones where stop-losses and liquidation orders are clustered, making them potential turning points. In this context, a short-term push toward $3.41 could serve to clear liquidity before another downward move resumes.

This setup suggests that traders should be prepared for heightened volatility in the days ahead. The market’s conflicting signals—a slight rise in OBV versus persistent bearish momentum and structure—indicate that caution is warranted. Traders looking to short the token might find optimal entry points around the $3.5–$3.6 range, especially if the price fails to reclaim those levels as support.

Ultimately, for Story [IP] to break free from its current bearish grip, it must not only breach these resistance zones but also sustain momentum above them. Until then, any upward movement is likely to be viewed as a retracement within a larger downtrend. The week ahead could prove pivotal in determining whether the token will establish a new base for a bullish reversal or continue its descent as broader market conditions remain uncertain.