NEAR Protocol [NEAR] has kicked off the new year with a noteworthy 10.42% increase in the past 24 hours. This marks its first significant rebound after a difficult December, during which it lost nearly 26% of its value. With this upturn, investors are left wondering: Is this a precursor to a sustained rally, or merely a brief surge before a potential bearish reversal?
TVL Stability: A Double-Edged Sword
The Total Value Locked (TVL) in NEAR’s ecosystem has shown impressive steadiness lately. Over the past month, the TVL has moved within a narrow range of $236.58 million to $259.85 million, currently resting at $253.52 million.
This stability reflects ongoing participation in activities like staking and liquidity provision, yet it doesn’t automatically signal a bullish future. A stagnant TVL may indicate a lack of growth, especially if user engagement fails to increase significantly.
Declining Network Fees: A Warning Sign
Examining network fees sheds more light on NEAR’s health. These fees serve as a direct indicator of activity, with higher fees usually suggesting greater engagement. Unfortunately, NEAR has seen a decline in fee generation recently.
Data indicates that NEAR gathered just $21,680 in fees—the lowest in the past 11 days. This downturn points to fewer transactions and decreased user participation, potentially undermining NEAR’s ability to maintain its current price rise.
Mixed Technical Signals: Bullish or Bearish?
The technical indicators present a mix of insights regarding NEAR’s short-term outlook. The Moving Average Convergence Divergence (MACD), frequently used to assess momentum, hints at a bearish scenario. The MACD line is approaching a “Death Cross,” a situation where it crosses below the signal line, commonly suggesting the start of a downtrend.
Conversely, the Relative Strength Index (RSI) offers a flicker of optimism. At 50.13, the RSI indicates mild bullish momentum. Nevertheless, its closeness to the neutral zone means any downturn could easily tip things in favor of the bears.
Analysts forecast that while the RSI might see a brief uptick, sustaining a bullish trend appears unlikely in light of the looming bearish indicators from the MACD.
NEAR’s price movements are nearing crucial levels that could dictate its next steps. On the weekly chart, the token approaches a supply zone—a resistance area where selling pressure is expected to rise. Should this zone hold firm, NEAR could face a reversal, possibly dropping to a key support level around $2.45.
Alternatively, if NEAR breaks through this supply zone, it could reignite bullish momentum and target a new monthly high. However, the imminent bearish crossover on the MACD points to a more probable downside scenario.
The Road Ahead for NEAR Protocol
While NEAR Protocol’s recent rally has sparked some optimism, a degree of caution remains essential. The stable TVL reflects consistency, but declining fees coupled with mixed technical signals indicate potential hurdles ahead.
If NEAR manages to draw in more user activity and surmount resistance levels, it may pave the way for additional gains. However, bearish indicators hint at a possible pullback in the near future.
Investors should keep a close eye on NEAR’s technical metrics and overall market conditions before making any moves. Whether this serves as a springboard for a short-term rally or signals a bearish downturn, the coming weeks will be pivotal for NEAR’s journey.
