NEAR Faces Bearish Sentiment Amid Declining Active Addresses and Supply Zone Pressures

• Market conditions point to a bearish outlook for Near Protocol (NEAR), with declining activity signaling potential further price drops.

• The substantial drop in active addresses indicates waning interest among investors, raising concerns over NEAR’s future performance.

• As noted by market analysts at COINOTAG, “The formation of the death cross—a pattern where the signal line crosses above the MACD line—further confirms this bearish signal.”

Discover the bearish trends affecting NEAR as active addresses decline and supply areas exert pressure, potentially foreshadowing a price drop.

Potential price drop coming?

The recent dip in active addresses on Near Protocol has been striking, showing a 23.8% decrease since the beginning of the year. This significant decline is often an indicator of reduced market engagement, which can negatively impact NEAR’s price dynamics.

As of now, active addresses sit at 3.2 million, down from approximately 4.2 million in January, according to data from Artemis. This alarming trend suggests that fewer participants are engaging with the protocol, a phenomenon that typically presses asset prices down further.

Source: Artemis

This dramatic decline indicates a diminishing number of market participants willing to transact or invest in NEAR, and if the downtrend continues, it could drive prices lower.

Supply zone exerts downward pressure on NEAR

The 4-hour price chart illustrates that NEAR is currently oscillating within a supply zone—a price range identified between $6.154 and $6.311. These zones are critical because they contain large sell orders that often negate upward movement.

Source: TradingView

Employing Fibonacci retracement levels, it becomes apparent that if sell pressure escalates, NEAR’s price could retrace to lows around $4.870. However, it’s essential to highlight several support levels where potential rebounds might occur at $5.712, $5.551, $5.390, and $5.161 respectively—these areas warrant close monitoring.

Bearish trend confirmed

Technical analysis indicates a solid bearish disposition for NEAR, as evidenced by the Average Directional Index (ADX), which is currently reading 42.19. This reading suggests a robust downward trend.

Source: TradingView

The “death cross” formation adds further weight to the bearish narrative. This pattern, characterized by the signal line surpassing the MACD line, signifies a favorable climate for selling. At present, the signal line rests at 0.135 while the MACD line stands at 0.128. If the ADX maintains its upward trajectory, it implies sustained downward momentum for NEAR.

Conclusion

In light of the current analysis, NEAR holders face an uphill battle as market dynamics tilt towards bearish sentiment. With active addresses declining and significant supply levels in play, the potential for further downward price action is considerable. Investors should remain vigilant and keep abreast of technical indicators to navigate this challenging landscape effectively.