Here’s Why Near Protocol (NEAR) Price Might Experience a 45% Decline Soon
NEAR Protocol (NEAR) has recently undergone a significant correction in its price, leading to a decrease in transactions since its peak on March 3. The Relative Strength Index (RSI) of NEAR has also been declining, although it remains above the overbought threshold. Additionally, the price chart shows a potential death cross formation, which is a bearish signal indicating a potential downtrend.
The combination of reduced transactions, a high yet decreasing RSI, and the imminent death cross raises concerns about the market outlook for NEAR.
The number of daily transactions for NEAR reached its peak of over 6 million on March 3 but has been declining in the past two weeks. This peak marked the highest daily transaction volume for the NEAR protocol since December 29, 2023, and the second-highest ever recorded.
During the period of increasing daily transactions from February 1 to March 3, the price of NEAR also followed suit, growing from $2.85 to $4.81, a growth of 68.77%.
However, despite the slowdown in transactions indicated by the 7-day moving average, the NEAR price experienced a significant surge, rising from $4.13 to $8.94 by March 14, marking a 116.46% increase. This suggests that the recent price jump of NEAR may be driven by broader market growth rather than its underlying fundamentals.
The RSI for NEAR remained above 80 from February 29 to March 13, coinciding with the period of the price surge. However, a correction followed, causing the NEAR price to drop from $8.84 to $6.60 in just four days. Currently, the NEAR RSI sits at 78, indicating a slight decrease in the momentum of price increases.
An RSI reading of 82 initially suggested that NEAR was potentially overbought, indicating that its price might have risen too quickly. This could result in a correction or pullback as traders attempt to secure profits.
The Relative Strength Index (RSI) is a momentum indicator used to evaluate overbought or oversold conditions based on recent price changes. An RSI above 70 is typically considered overbought, while an RSI below 30 is considered oversold. These thresholds can help traders identify potential reversal points based on perceived overvaluation or undervaluation.
Looking at the NEAR price chart, it appears that the short-term Exponential Moving Average (EMA) lines are nearing a crossing below the longer-term lines. This formation, known as a “death cross,” is a bearish signal indicating a reversal from a bullish to a bearish trend.
In terms of price prediction, the $5.13 level is a crucial support zone for NEAR. If NEAR fails to maintain this support, it could experience a decline towards $3.64, representing a potential drop of about 45% from its current price of $6.64. Conversely, if the current trend reverses, NEAR could climb back to the $9 mark, indicating a potential increase of approximately 35%.
Please note that cryptocurrency markets are highly volatile, and price predictions should be taken with caution.