Selloff risks persist for the NEAR price as it drops 20% in just a day

NEAR protocol
image from medium.com

Key Takeaways:

  • NEAR, the native token of a layer-1 blockchain of the same name, slid by 20% since Sunday.
  • Previously, the price had rallied 60% amid the red candles across the crypto market..
  • What’s ahead for the “climate-neutral” crypto?

YEREVAN (CoinChapter.com) – The NEAR price declined 20% Monday a day after establishing its six-week high of $12.1. Meanwhile, it risked crashing by another 19% based on a certain classic technical setup brewing on its charts.

In detail, the NEAR price has been painting an Ascending Channel pattern, featuring two parallel trendlines and a significant mid-range. The formation alone does not predict a continuation bias. However, it is instrumental in determining NEAR’s short-term vector.

NEAR price chart ft. Ascending Channel. Source: TradingView.com
NEAR price chart ft. Ascending Channel. Source: TradingView.com

As of Monday’s New York session, the NEAR price sought additional support from its 20-day exponential moving average (EMA-20; blue wave on the chart above), while eyeing further declines towards the Ascending Channel’s lower trendline.

Also read: NEAR protocol signed an NFT deal, and scooped 15% amid the market correction.

Moreover, NEAR’s daily relative strength index (RSI) also corrected to ’50,’ alongside the price drop, illustrating clear sync with the coin’s downtrend and momentum. That further hinted that NEAR could drop further in the coming sessions.

Macro fundamentals around the NEAR price

In detail, while the rest of the crypto market’s top 100 tokens printed red candles between Dec 7 and Dec 11, the NEAR price gained 60% in the same period. Furthermore, the cryptocurrency’s heavy trading volume at the time indicated heightened interest from investors and traders.

One of the driving forces behind the uptrend was integration by trading app MoonPay. On Dec 8, the company announced they allowed NEAR trading for their users worldwide. Subsequently, MoonPay also enlarged NEAR’s pool of potential traders, as the token is not listed on large US exchanges like Coinbase.

Moreover, a crypto analyst that calls himself ‘Guy’ asserted that the absence of listings on major US crypto exchanges is the main reason behind NEAR’s small user base. Nonetheless, the analyst sees a big year ahead for NEAR. ‘Guy’ additionally noted the Rainbow Bridge will play a significant role in the “upcoming rally.”

In detail, the Rainbow Bridge is a connection channel that allows users to move crypto assets from Ethereum to NEAR and vice versa. It launched in March 2021 and helped boost the NEAR price.

Transaction metrics on the Near blockchain are trending in the right direction. The number of daily transactions has grown by 30x since the introduction of the Rainbow Bridge in March and the total amount of gas spent is up nearly 20x with no signs of slowing down.

said the analyst.
Also read: NEAR secures new all-time high amid NEAR Protocol's $800M Fund launch.

Despite the latest setback, some crypto analysts see NEAR doing well in 2022, thanks to its growing exposure and widening functionality. However, the short-term prognosis looks bearish for the digital asset, as the Ascending Channel formation was in effect throughout the previous four months and could persist into the year’s end as well.

As of publication, the NEAR/USD pair traded at $9.28 in the New York session Monday.

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NEAR Price, Selloff risks persist for the NEAR price as it drops 20% in just a day

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