Posted: December 27, 2024

• On-chain metrics revealed a declining number of active addresses, with Open Interest also falling in recent days
• Technical indicators showed that NEAR’s recent decline has been losing steam

NEAR has been among the market’s least-performing tokens recently, dropping by 16.44% over the past month and another 6.57% in the last 24 hours – A sign of its bearish trajectory.

Despite this negative sentiment, however, market analysis indicated that bearish momentum might be easing somewhat. This cooling period could set the stage for a significant price rebound, potentially offsetting recent losses.

Lack of interest pushes NEAR lower

There has been a decline in Daily Active Addresses on the NEAR network, as reported by Artemis – A sign of fading interest among users and investors.

Active Addresses (AA) is a key measure of a network’s utility and usage, and they are closely tied to a token’s perceived value. When both Active Addresses and the price drop simultaneously, it signals diminishing interest, potentially leading to further price declines.

At the time of writing, NEAR’s Daily Active Addresses fell sharply for four consecutive days, dropping from 4.4 million to 3.9 million. This decline was mirrored in NEAR’s price, with the crypto trading at $5.11 at press time, according to CoinMarketCap.

AMBCrypto’s analysis also revealed high selling pressure, particularly from derivative traders, further weighing on NEAR’s price performance.

Derivative traders show lack of confidence in NEAR

Selling pressure on NEAR has intensified too, particularly among derivative traders who have been predominantly taking short positions.

According to Coinglass, the long-to-short ratio for NEAR had a reading of 0.8793, indicating a surge in short contracts. Traders open short positions when they anticipate a price decline. A long-to-short ratio below 1 reflects a higher number of sellers, with lower readings signifying stronger bearish sentiment.

The impact of this selling pressure seemed to be evident when NEAR’s Open Interest was checked out. In fact, it dropped by 6.86% over the last 24 hours, falling to $237.39 million on the charts. 

Liquidation data further reflected the bearish market sentiment. Of the $966,310 worth of contracts liquidated in the market, $901,510 came from long traders, who faced losses as the price moved against their predictions. This trend suggests that NEAR’s price may continue its downward trajectory.

However, technical indicators seemed to point towards a possible weakening of the bearish trend.

For example – The Average Directional Index (ADX), which measures the strength of a market trend, revealed a declining value on the weekly chart. A high ADX reading indicates a strong trend, while a downward ADX suggests weakening momentum.

At press time, NEAR’s ADX had a reading of 17.85 while on a downtrend, meaning that selling activity may subside soon. If this trend persists, NEAR could see a rebound and begin trading higher.

What’s next for NEAR?

On the weekly chart, NEAR seemed to be trading within a symmetrical triangle pattern—A consolidation phase where the price narrows between defined support and resistance levels as buying activity gradually increases. Historically, such a pattern often precedes a significant upward breakout.

However, sustained selling pressure could push NEAR down to the $4.625 support level, or potentially lower, towards the base of the symmetrical channel.

This decline would likely mark the final leg of the ongoing downtrend before a rebound, with the asset expected to climb back to at least $10 on the charts. 

In this context, the ongoing downturn may serve as a precursor to a major price swing in the near future.