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NEAR Protocol [NEAR] has started the new year on a high note, with a 10.42% gain in the past 24 hours. This marks its first significant uptick after a challenging December, during which it lost nearly 26% of its value. While this surge is encouraging for investors, the big question remains: Is this the beginning of a sustained rally, or just a fleeting moment before a bearish reversal?
Stability in TVL: A Double-Edged Sword
NEAR’s Total Value Locked (TVL), a metric that reflects the value of assets engaged in its ecosystem, has shown a remarkable degree of stability. Over the last month, NEAR’s TVL has fluctuated within a narrow range of $236.58 million to $259.85 million, and as of now, it stands at $253.52 million.
While this stability indicates consistent participation in activities like staking and liquidity provision, it doesn’t necessarily guarantee a bullish outlook. A flat TVL could also signal stagnation, especially if user activity isn’t growing significantly.
Declining Network Fees: A Warning Sign
Beyond TVL, network fees provide another layer of insight into NEAR’s ecosystem health. Fees are a direct indicator of activity, with higher fees often signaling robust engagement. Unfortunately, NEAR’s fee generation has been on a downward trend.
Recent data reveals that NEAR collected just $21,680 in fees—the lowest in the past 11 days. This decline points to reduced transactions and user participation, which could hinder NEAR’s ability to sustain its current price rally.
Mixed Technical Signals: Bullish or Bearish?
Technical indicators offer a mixed bag of insights into NEAR’s short-term prospects. The Moving Average Convergence Divergence (MACD), a tool often used to gauge momentum, suggests a bearish outlook. The MACD line is nearing a “Death Cross,” a pattern where the MACD line crosses below the signal line, often signaling the start of a downtrend.
However, the Relative Strength Index (RSI) provides a glimmer of hope. Currently sitting at 50.13, the RSI suggests mild bullish momentum. But with its proximity to the neutral zone, any downward movement could quickly tip the scales in favor of the bears.
Analysts predict that while the RSI might see a short-term increase, it is unlikely to sustain a bullish trajectory for long, especially given the looming bearish signals from the MACD.
Key Levels to Watch
NEAR’s price action is approaching critical levels that could determine its next move. On the weekly chart, the token is nearing a supply zone—a resistance area where selling pressure could increase. If this zone holds, NEAR may face a reversal, potentially dropping to a key support level around $2.45.
On the flip side, if NEAR breaks through the supply zone, it could reignite bullish momentum and aim for a new monthly high. However, the impending bearish crossover on the MACD suggests that a downside scenario is more likely.
The Road Ahead for NEAR Protocol
NEAR Protocol’s recent rally has brought a wave of optimism, but caution is warranted. The stable TVL shows consistency, yet declining fees and mixed technical signals point to potential challenges.
If NEAR can attract more user activity and break past resistance levels, it may chart a path toward further gains. However, the bearish indicators suggest that a pullback could be on the horizon.
Investors should closely monitor NEAR’s technical metrics and market conditions before making any decisions. Whether it’s a short-term rally or a bearish reversal, the next few weeks will be crucial for NEAR’s trajectory.
