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Key Takeaways:
- Despite a 15% price rally to $2.89, IP token’s funding rate has plunged to -0.62%, signaling rising short interest and bearish sentiment among traders.
- If IP fails to hold its $2.78 support level, it risks sliding toward $1.90 or even retesting its all-time low of $1.36 amid broader market uncertainty and geopolitical tensions.
The recent surge in IP token’s price has caught the eye of traders, but sentiment remains divided. The move comes amid a broader market lull, with most cryptocurrencies either flatlining or posting modest losses. Despite this sluggish environment, IP has rallied 15% in the past 24 hours to trade at $2.89. However, growing short interest suggests this may not be the start of a sustained bull run.
Traders Bet Against IP’s Double-Digit Rally
IP’s impressive price action bucks the prevailing market trend, yet on-chain metrics indicate that derivatives traders are increasingly skeptical. According to data from Coinglass, IP’s funding rate has plunged to -0.62%, marking its lowest level in over four months. This sharp shift reflects a bearish tilt, as many traders are now positioning for a potential price reversal.
Funding rates represent periodic payments between long and short positions in perpetual futures markets. When the rate is positive, bulls dominate and pay a fee to bears; when negative, shorts outweigh longs—highlighting bearish sentiment.
This steep decline in IP’s funding rate underscores a surge in downside bets, with market participants unconvinced by the token’s recent rally. Many cite heightened geopolitical tensions in the Middle East as a reason for caution, believing the upswing may prove unsustainable.
Momentum Indicators Support Bearish Outlook
Adding to the cautious sentiment, IP’s Balance of Power (BoP) indicator is firmly in the red. Currently reading -0.70 on the daily chart, the BoP trend suggests selling momentum is outpacing buying interest. Negative BoP levels often precede further price declines, reinforcing the bearish case.
Can Bulls Hold the Line?
At present, IP trades just above a critical support level at $2.78. If buying demand fails to materialize and the token dips below this floor, a further slide toward $1.90 could be in the cards. In a worst-case scenario, failure to defend this key level could send IP retesting its all-time low of $1.36.
On the other hand, a renewed wave of demand could fuel continued upside, with the next resistance target near $3.89. For now, traders remain on edge—torn between hope for a breakout and caution over a potential dead cat bounce.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
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I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
