Story [IP] gains over 10% amid liquidity surge, but is a reversal here?

• IP’s rally over the past 24 hours has been driven by a surge in liquidity inflow from on-chain investors.
• A coalition of spot and derivative traders opposes the uptrend, with the group beginning to force a sell-off.

Story [IP] has gained slightly over 10% within the period, backed by strong market momentum, as volume spiked 286.56% to $50.3 million.

Capital inflow remains high, with IP’s Total Value Locked (TVL) hitting a new peak. This surge has led to notable losses for short traders, even as more derivative traders continue to bet on a price drop.

Will the bears absorb the losses, or will investors back down? AMBCrypto analyzes the market outlook.

Liquidity surges among on-chain investors

IP’s recent rally comes amid a significant increase in Total Value Locked (TVL) across protocols on its chain.

According to DeFiLlama, IP’s TVL reached a new high of $25.33 million, rebounding from a low of $10.66 million recorded between the 22nd of May to the 14th of June.

Source: DeFiLlama

This type of sustained surge suggests growing long-term investor interest and expectations for a continued rally. While some derivative traders anticipate a pullback, others appear increasingly bullish.

Derivative market shows rising buy pressure

At press time, Coinalyze data showed that the Long-to-Short Ratio in the derivatives market had shifted toward buyers in the past 24 hours.

The ratio across all exchanges indicated that 54.31% of volume came from long positions, while short positions accounted for 45.69%, reflecting a ratio of 1.19.

Source: Coinalyze

This buying surge coincided with a major liquidation event that ran counter to the IP rally. Within the period, traders who bet against IP lost $189,000, while those who went long lost only $29,300.

This means that for every $1 lost by long positions, $6.49 was lost by shorts—a significant imbalance that tilted momentum toward the bulls.

However, this dynamic appears to be shifting. A close look at lower timeframes shows that sellers are starting to close the gap.

In the last hour, for instance, the long volume dropped to 51.86%, while short volume rose to 48.14%—hinting at a gradual resurgence of seller dominance.

Sellers push to regain control of IP

Sellers are becoming more active, not only in derivatives but also in spot markets.

On the derivatives side, Coinalyze shows that the Aggregated Funding Rate has turned sharply negative, hitting -0.2107, its lowest level since the 22nd of June.

The Aggregated Funding Rate is a recurring fee between long and short positions in perpetual contracts, designed to keep prices aligned with spot values across exchanges.

Source: TradingView

A significantly negative rate means short traders are paying fees, a sign that market momentum is shifting in their favor.

Adding to this bearish pressure is the Spot Exchange Netflow, which recorded more inflows than outflows, suggesting more IP tokens are being moved to exchanges for potential selling.

Notably, netflow on CoinGlass reached $1.98 million, the highest profit-taking point yet. Over the past two days, total sell-offs have hit $3.42 million.

This ongoing sell pressure suggests IP’s chances of sustaining its rally are narrowing.