NEAR Protocol, the scalable blockchain network known for its speed and efficiency, is making headlines as its native token shows significant price action. After breaking through months of resistance, the price of NEAR has pulled back, retesting the critical $5 support level. Traders and investors are now wondering: will NEAR rebound and continue its upward momentum toward $7.71, or is a dip to $4.50 ahead?

The recent market correction has sent NEAR’s price downward, losing nearly 10% over the past two days. However, the token’s price has been holding steady at the psychological $5 support level, a critical price point that could determine its next move. Let’s explore the key factors influencing NEAR’s price and what might happen next.

Price Analysis: Bearish Pullback or Bullish Continuation?

The NEAR token’s recent price action is reflective of both bullish and bearish market conditions. After a strong rally earlier this year, the price surged from a low of $3.50 to a high of $5.75—a 64% increase over a series of consecutive bullish candles. This rally seemed promising, as it reflected growing investor confidence in NEAR Protocol, fueled by positive sentiment in the broader cryptocurrency market.

However, after reaching the $5.75 mark, the rally began to lose steam. A key resistance level, the 38.20% Fibonacci retracement at $5.56, proved too strong to break through. This price level marked a turning point, and the token experienced a bearish reversal, with the price falling nearly 10% in just a couple of days.

The bearish reversal appears to be a result of significant selling pressure around the $5.56 level, forming an “evening star” pattern on the chart, which is often seen as a bearish signal. Additionally, technical indicators like the Exponential Moving Averages (EMAs) suggest that the market could continue in a sideways trend unless new bullish momentum surfaces.

The Moving Average Convergence Divergence (MACD) indicator also shows a decline in bullish momentum, as the gap between the MACD and signal lines narrows. This suggests that the bullish strength is fading, but the trend is not yet fully reversed, meaning the market could be in a period of consolidation.

Improving On-Chain Metrics Could Trigger a Rally

Despite the price pullback, NEAR Protocol has demonstrated strong on-chain metrics, which could act as a catalyst for a rebound. Transaction activity on the network has shown encouraging signs of growth, with transaction fees spiking during the April 2024 rally and now rebounding from lower levels. A break above the $30,000 transaction fee threshold could signal the continuation of the recent recovery.

Further supporting the potential for growth, NEAR Protocol saw a substantial increase in daily transactions, reaching 7.5 million transactions recently. The addition of 982,375 new addresses to the network also demonstrates growing adoption and interest in the ecosystem. These metrics point to a strengthening network and could provide the foundation for a price surge if the broader market conditions continue to improve.

As network activity continues to rise, the demand for NEAR tokens could increase, pushing its price higher. If the price holds steady above the $5 support level, there’s a strong chance that the uptrend will resume, especially if NEAR’s technical indicators start to show more bullish signals.

Can NEAR Break $5.56 and Target $7.71?

Looking at the charts, there’s a clear path for NEAR to continue its bullish trajectory if it can break above the key $5.56 resistance level. If NEAR holds above dynamic support, represented by the moving average line, the uptrend could push the price toward the 78.6% Fibonacci retracement level, which stands at $7.71.

This potential breakout would mark the continuation of the bull run that started earlier this year, driven by growing adoption of the NEAR ecosystem and the expanding use cases for decentralized applications (dApps) built on the platform.

What’s Next for NEAR Protocol?

In the short term, the price of NEAR is at a critical juncture. The $5 level must hold as support for the token to maintain its upward momentum. If the price breaks below this level and reaches $4.50, it could signal a deeper correction and a potential change in market sentiment.

However, if NEAR manages to hold above the $5 mark and break through the resistance at $5.56, it could rally toward the $7.71 target. The combination of improving on-chain metrics, growing transaction activity, and a potential bullish continuation in the broader crypto market could fuel this upward movement.

For traders and investors, the coming days will be crucial in determining whether NEAR can maintain its bullish momentum or if further consolidation and a price dip are ahead. Either way, NEAR Protocol’s continued development and expanding ecosystem make it one to watch in the altcoin market.