- Story [IP] revealed some developing bullish momentum on the charts
- Lack of demand meant a strong rally did not yet appear likely
Story [IP] has been on a downtrend since May. While its recent rally was a positive sign, technical analysis showed that traders must take a nuanced approach. In fact, at press time, the short-term expectations were bullish, with the potential for a minor dip to $2.85.
Bitcoin [BTC] would need to climb towards $110k and consolidate for the altcoin market to have a chance to make gains. If this does not happen, or IP falls below $2.8, traders could shift towards having a bearish outlook.
Source: IP/USDT on TradingView
The 12-hour chart highlighted some hope of a recovery in the form of a bullish market structure break. Highlighted by the cyan line, IP made a new local high. The trading volume during this structure shift was high, but it tapered off over the past couple of days.
The OBV seemed yet to reclaim the levels it had been at earlier this month. This could be an early signal that buying pressure was relatively weak. The bullish internal structure appeared to have been overpowered by the bearish swing structure. Based on the swing move earlier this month from $4.26 to $2.44, Fibonacci retracement levels were plotted too.
The upward momentum of the past week was not yet firm. Especially since the RSI was yet to cross the neutral 50 threshold. Combined with the weak demand, IP might have a difficult time climbing past the $3.34 resistance level.
Further north, the $3.64 and $3.86-levels would be the next resistances where a bearish reversal could occur.
Liquidity provides a clue for traders looking to go long
The 2-week liquidation heatmap revealed that there were two considerably strong magnetic zones at $2.5 and $3.44. They were both almost equidistant from the press time market price of $2.94. The liquidity cluster to the south at $2.42-$2.5 was slightly denser too.
Given the bullish structure on the 12-hour chart, it looked likely that IP might push higher. At the same time, the lack of high demand could stall Story’s bullish progress and even lead to a minor dip.
Hence, traders can also look to go long at the $2.85 zone, another nearby liquidity cluster. A tight stop-loss at $2.78 would be feasible, since a pullback can’t be ruled out, especially if Bitcoin faces volatility.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
