NEAR nosedive spree could cause another 50% loss — here’s why

NEW DELHI (CoinChapter.com) — Near Protocol’s native token NEAR might be facing a fall of over 50% in prices if the token confirms a bearish pattern called the bear pennant.

Pennants are continuation patterns. The pattern forms when a period of consolidation with converging trendlines follows a large movement in a cryptocurrency’s prices. Then, the asset breaks out in the same direction as the large initial movement.

Volumes play an important role in verifying the pattern.

Per the rules of technical analysis, the consolidation should occur with lower volumes, while higher volumes should accompany breakouts. Traders calculate the price target by applying the initial flagpole’s height to the point where the price breaks out from the pennant.

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As a result, NEAR prices might fall to $1.6, carving off just over 50% from the token’s current prices.

NEAR’s MACD Continues To Be Bullish

NEAR prices surged with the wider crypto market rally, moving to reach a high of $3.7 on Jun 21 from Jun 18’s low of $2.9. After that, however, the altcoin’s price action floundered as traders started selling to book profits from the crypto’s relief rally.

If the bears continue selling, NEAR prices might end up testing immediate support around $3. Moreover, if the immediate support fails, the Near token’s prices could fall to $2.43. Finally, a marketwide sell-off might see NEAR prices lose nearly 39% of their value to reach $1.99 before recovering.

Meanwhile, the momentum oscillator MACD continues to forecast a strengthening upward momentum for the Near Protocol token. Moreover, NEAR’s MACD trendlines charted a bullish crossover on Jun 19.

In detail, a bullish crossover occurs when the MACD line (difference between 12-day and 26-day EMA) moves above the MACD signal line (9-day EMA of MACD). Traders usually consider the pattern a buy signal.

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If traders start a buying spree, NEAR prices might flip their immediate resistance at $3.7. Breaching and consolidating above its immediate resistance might help the token’s prices target resistance from its 20-day exponential moving average (20-day EMA, red wave) at $4.17.

Finally, conquering the EMA resistance could provide the altcoin’s prices an impetus to rise nearly 53% to reach $5.1 before corrections pare gains.

At writing, NEAR was trading at $3.3, down 5.14% on the day.