Story Protocol Down 50% from ATH as Fundamentals Show Weakness – Is $5 Next?

Story Protocol (IP) price tumbled 50% over the last 24 hours after aggressive profit-taking drove the IP token down from its all-time high of $14.99 to $7.25 at press time.

This decline followed a recent 120% rally that lifted IP token from $5.58 in mid-August, coinciding with co-founder Jason Zhao’s departure, before reaching its peak of $14.99 four days ago.

Many attributed the brief rally to the project’s announcement of the Origin Summit, held on September 23, in Seoul during Korea Blockchain Week.

The summit served as a major event connecting AI, intellectual property, and blockchain, bringing together speakers and executives from entertainment and IP companies, including SM Entertainment, Azuki, and Moonbirds.

Major crypto and investment firms, including Grayscale, Polygon, and Animoca Brands, also participated to discuss IP tokenization through Story’s infrastructure.

Story Protocol Weak Fundamentals See Investors Question Project Sustainability

However, the event-driven surge couldn’t sustain the token against its weak fundamentals regarding project value creation and sustainability.

Data from DefiLlama shows that Story Protocol, with a market capitalization of $2.27 billion, could only boast of $29.09 million in total value locked (TVL).

Moreso, the protocol generates just $679 in daily revenue, far below recently launched protocols like Aster DEX, which carries a similar $3 billion valuation while generating approximately $13 million in daily revenue.

Crypto data scientist Budihil Vyas noted that the IP chart resembles a crime scene and predicts a return to the $5 level where the initial pump began.

Story Protocol’s whitepaper presents the project as a blockchain initiative aimed at transforming intellectual property management through on-chain solutions.

Instead of relying on traditional copyright frameworks, the platform empowers creators to register, monitor, and monetize their works through a decentralized network.

This includes books, films, music, and AI-generated content.

The protocol has raised approximately $134.3 million in equity financing across multiple rounds.

These include a May 2023 seed round generating $29.3 million, a September 2023 Series A yielding $25 million, and an August 2024 Series B led by Andreessen Horowitz’s a16z crypto division, contributing $80 million.

Despite these investments, the limited value captured by the project has damaged its reputation, with many now viewing it as another unsustainable crypto venture.

Technical Analysis: EMA Breakdown Shows Story Protocol’s Path Back to $5 Support

Technically, the Story Protocol chart reveals a dramatic parabolic rally from around $6 in early August to nearly $15 in mid-September, representing roughly a 150% gain.

The price has since dropped approximately 55% to the current level of $7.237, confirming massive selling after reaching all-time highs.

The technical setup presents several warning signs for bulls. The token broke below the ascending trendline that supported the entire August-September rally, confirming the uptrend violation.

Price is currently testing the $7 support level, which matches a previous resistance area from late August.

Volume patterns show heavy selling pressure during the recent decline, with red volume bars dominating recent sessions.

The token approaches the 50% Fibonacci retracement level of the entire rally, which typically serves as critical support.

If this level fails to hold, the next targets align with projected levels at $6.067, $4.751, and ultimately $3.463, representing a complete retracement to pre-rally levels.

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