NEAR Protocol Darts Below Critical Support as Network Upgrade Disrupts Trading
Market Structure Shifts Lower
- NEAR declined 33.5% in November, erasing Q3 gains.
- Trading suspension triggered a liquidity crisis as deposits and withdrawals were frozen.
- Price recovered to $1.70 after hitting six-month lows near $1.30.
NEAR faced a 33.5% decline in November, effectively erasing all of the Q3 recovery. Early this month, the trading suspension caused a cascading liquidity crisis as most major exchanges froze deposits and withdrawals to allow for the network upgrade. NEAR holders had to wait as much as two weeks to access trading, further fueling the month-long sell-off. Fortunately, price recovered to $1.70 per token after swinging to six-month lows near 1.30.
Over the past month, NEAR Protocol has lost 33.5% of its value dropping to $1.70. The loss is accelerating as Upbit and Bithumb accounts for 74% of NEAR’s total volume on major exchanges for the month. The update led to both exchanges temporarily suspending deposits and withdrawals, effectively removing the majority of its liquidity and causing the price to drop through current supports. NEAR has struggled to recover since the announcement, and the token is currently walking towards the doormat it stepped on at the end of August.
| Metric | Value |
|---|---|
| Asset | NEAR PROTOCOL (NEAR) |
| Current Price | $1.70 |
| Weekly Performance | -6.03% |
| Monthly Performance | -33.50% |
| RSI (Relative Strength Index) | 39.6 |
| ADX (Average Directional Index) | 24.3 |
| MACD (MACD Level) | -0.12 |
| CCI (Commodity Channel Index, 20-period) | -103.12 |
RSI at 43.7 Signals Mild Oversold Conditions After Month-Long Slide
The Relative Strength Index currently stands at a value of 43.68 on the daily time frame showing that LINK is in a mild oversold condition, but given the level of capitulation it has yet to reach oversold levels. The oscillator has rounded off from neutral ground above 50 just two weeks ago which exposed consistent selling demand rather than panic dumps. A similar RSI reading in September to the one present now saw prices bounce 15% as the previous period of consolidation concluded.
Therefore, the RSI is riding the 40 level that provides tentative support. Should this give way to selling pressure, NPRO/USD should gravitate back towards the November 21 low. This is followed by the early November low that resides as the trading range’s downside boundary.
ADX at 24.3 Shows Bearish Trend Gaining Traction
When we look at a long-term chart of front-month futures going back to 2010, it outlines our expectation of where prices would settle if there were no fundamental shocks to the supply and demand dynamic. While futures have done an admirable job of foreshadowing the secular change in values that is necessary to effectuate more industry dislocation, let’s remember that physical barrels need to find a home sooner rather than later.
So, day traders shouldn’t be looking for the oversold bounce that inevitably materializes when many weaker-handed players finally puke out their losing shares. Instead, disciplined range plays and breakout shorts offer the most reliable ways to book intraday profits until we see a trend day with two-sided action.
Price Trapped Below Entire EMA Ribbon Since Breaking $2.00
Looking at the chart above NEAR/USDT is literally on life support, trading a few cents above the $1 psychological level and the November low. MEAR technical overview on moving averages suggests that the token has been deeply oversold for more than two weeks.
The most telling sign of this negative momentum is the way in which the 20-day EMA at $1.83 has transitioned from acting as a level of support to one of resistance following the aforementioned breach of the psychological $2.00 mark. This former support zone will now be the first significant obstacle standing in the way of recovery, and is situated 8% north of the current value of the token. The fact that the 10 and 20 EMAs are currently so close to each other also indicates that the aforementioned selling pressure has not yet run its course – typically the broader this gap, the closer the market is to a potential bottom.
Resistance Wall Builds From $1.83 to $2.05 After Support Destruction
If the price pushes above the 50-day EMA, the next likely barrier will be the 200-day EMA at $2.42. converged with the falling trendline. Above this level, the 52-week high at $3.12 would likely attract some profit-taking as it should also coincide with the upper Bollinger Band expanding above the prior high.
Currently, those who bought near the April low between $1.50 and $1.60 are slightly underwater. However, they have proven to be strong hands in the past. Moreover, restarts in China appear to be on a solid uptrend that is likely to foster firmer bottoming support than even more extensive contagion in 2020.
The market structure is tilting bearish as long as NEAR is below $1.83. The gap between current price and the nearest resistance level gives an asymmetric profile of more upside (8%) to resistance versus more downside (6%) to support. This compression tends to break in the direction of the trend, which is currently unfavorable.
Bears Target $1.59 Unless Bulls Reclaim $1.83 on Volume
Buyers must show conviction and breach the $2.00 zone to clear supply and confirm any change in the short-term path to a bullish trend. From here, magnet targets would be the 200-day EMA at $2.24 and the 50% retrace at $2.29.
If bulls go for an immediate rebound, expect stiff resistance in price congestion reinforced by the 21 and 50-day moving averages closely following the $1.86 price point. Next up, the $2 psychological level acts as short-term resistance before the journey back to the $2.14 level where the 61.8% Fibonacci level stalls advances.
Due to the technical havoc and constant trading halts, NEAR’s most likely immediate trajectory entails ranging between $1.65-$1.83 as investors price in the network update. To gain any upside traction, further to neutralizing exchange activity on major liquid books, new buyers would also need to be incentivized through NPRO selling.
