Key Takeaways
Why could IP’s drop be temporary?
Strong retail participation and buyer dominance in Futures suggest the decline may be a short-term correction, not a new downtrend.
What levels are critical for reversal?
Holding above the $11.37 market gap is key; failure to do so could trigger further downside before a potential recovery.
Story [IP] prices have dropped by nearly 10% over the last 24 hours, reflecting a building bearish momentum on its price after recent gains.
The move has left the token community with mixed reactions on whether the drop was just a price correction or a start on a new trend.
Narrowing down to the daily chart, the drop left the token prices testing a market gap at around $11.37. This insinuated that the drop was just a short-term correction.
As seen on the charts, IP appeared to have bounced-off strongly, indicating that a reversal could have just started, with the next target level being $15 resistance.
Source: TradingView
On-chain metrics lean bullish
Despite the technical pullback, on-chain activity also sparked bullish signals.
CryptoQuant’s Spot Retail Activity Data showed heightened retail participation in IP’s spot market, with traders steadily increasing their activity over the past day.
This influx of retail demand could help stabilize price action, especially if broader market sentiment remains supportive.
Source: CryptoQuant
But, in most cases, it is the whales who determine the market direction. However, the Spot Volume Bubble Map indicated heating at press time.
The retail traders could be equal to the task by provide the required momentum for a potential reversal.
Source: CryptoQuant
The Futures market added another layer of interest. The Futures Taker CVD (Cumulative Volume Delta, 90-day) data highlighted a noticeable increase in buyer dominance at the time of writing.
The buyer dominant stood at $11.87, suggesting that traders were favoring long positions despite the dip in Spot prices.
Source: CryptoQuant
What could be in store for IP?
If retail traders continue to fuel spot demand and buyers maintain their edge in the Futures market, the token could finally find support, with the current gap sparking some green signals for a potential reversal zone.
However, the chances of a bearish continuation cannot be completely ignored. If the support zone developing at the current market gap fail to materialize, the token prices could dip further.
But as it stands, the balance of signals from all the metrics suggests cautious optimism. The underlying demand from retail traders and Futures buyers hints at potential price reversal.
