NEAR Protocol (NEAR) has found itself at a crossroads in the market, with recent price movements and market sentiment creating uncertainty about its short-term trajectory. After a decline of 3.80% in the past 24 hours, NEAR’s price has dropped to $3.38, continuing a larger downward trend of nearly 37% over the past month. As the token struggles to regain footing, investors are questioning whether a rebound is on the horizon or if further declines are imminent.

Critical Support Level Under Threat

NEAR’s price has recently dropped below its crucial support level at $3.50, following a period of consolidation between $3.50 and $8.30. Despite this, NEAR has shown some resilience by attempting to reclaim this support, trading back within the consolidation range and forming a minor upward trend. However, it remains uncertain whether this move represents a genuine recovery or simply a lower high within a larger bearish structure. If NEAR fails to hold above the $3.50 level, further declines could be expected, confirming a continuation of the broader downtrend.

Mixed Signals from Market Indicators

A range of market metrics points to a divided sentiment surrounding NEAR. On the bearish side, the negative Funding Rate of -0.0170 signals that sellers are dominating the market, anticipating a continued downturn. The negative funding rate suggests that traders are more inclined to bet against the asset, adding downward pressure to its price. Additionally, long liquidations have far outpaced short liquidations, with $137,140 worth of long positions liquidated in the past 24 hours compared to just $24,170 in short liquidations. This suggests that sellers hold the upper hand, and further declines are more likely in the short term.

On the other hand, the Taker Buy-Sell Ratio, which measures the balance of buying and selling volume, indicates that buyers are still active in the market. The current ratio of 1.004 means that buying pressure has marginally outpaced selling activity over the past day, hinting at a slight bullish sentiment. However, this indicator alone may not be enough to reverse the prevailing bearish trend unless buying volume strengthens significantly.

Decline in Active Addresses Could Signal a Larger Problem

Another concerning factor for NEAR is the sharp decline in daily active addresses on the network. Active addresses dropped from 4.2 million to 3.0 million within a few days, marking a significant decrease in network activity. This reduction is indicative of traders likely exiting their positions, potentially due to the asset’s declining price. When active addresses fall during a price drop, it suggests a lack of confidence in the asset, which could lead to further selling pressure and further price declines.

The drop in active addresses also points to a potential slowdown in network growth and user engagement. A decrease in active participation on the network during a price decline typically signals a lack of strong support from the broader community, further increasing the likelihood of continued downward momentum.

What Lies Ahead for NEAR?

Given the combination of bearish signals and mixed sentiment, NEAR faces a precarious position in the market. While recent attempts to reclaim lost support levels provide some hope, the broader trend remains uncertain. If the bearish indicators persist, NEAR could face further declines in the near future.

However, the slight bullish pressure reflected in the Taker Buy-Sell Ratio suggests that a reversal could be possible if buying activity picks up. Investors will need to closely monitor the market over the coming days to determine whether the support levels can hold or if the price will continue to decline.

Ultimately, NEAR’s next move will depend on how the market sentiment evolves, and whether the bulls can regain control in the face of ongoing selling pressure. Until clearer signals emerge, NEAR will likely continue to face a period of uncertainty, with potential for further downside if bearish trends prevail.