NEAR Protocol's native token, NEAR, is trading around $3.76 on Tuesday, extending its recent decline after a 7% drop in the past 24 hours. The cryptocurrency has now posted three consecutive weeks of losses, with technical indicators pointing to continued bearish momentum.
The price weakness comes despite a significant governance decision. On Monday, NEAR's decentralized governance body, House of Stake, approved proposal HSP-029, which outlines a gradual reduction in the network's maximum annual token issuance from 2.5% to 1.6% over a 24-month period. This move is designed to slow supply growth and improve the token's long-term economic structure.
However, the approval has not translated into immediate price support. The market's reaction suggests that broader sentiment and technical factors are outweighing the positive tokenomics development.
Derivatives market shows weakening positioning
NEAR's derivatives market is also reflecting bearish sentiment. According to CoinGlass data, NEAR futures open interest has declined by 2.75% over the last 24 hours, now standing at $1.01 billion. This drop is notable because open interest had been falling since reaching a high on October 25, indicating that traders are reducing their exposure amid ongoing volatility.
The combination of falling prices and declining open interest suggests that market participants are not confident in a near-term recovery, despite the governance approval.
Technical analysis: support and resistance levels
On the daily chart, NEAR remains below its 50-period exponential moving average (EMA) at $4.3677 and its 200-period EMA at $4.5235. Both indicators are positioned above the current price, reinforcing the bearish short-term trend.
The four-hour chart shows a similar pattern, with NEAR trading below its 50-period EMA near $4.3677 and its 200-period EMA around $4.5235. The shorter moving average has slipped below the longer one, a bearish crossover that further confirms the negative outlook.
NEAR is currently trading within a descending channel, a technical pattern formed by two downward-sloping trendlines. The token is approaching the channel's lower boundary near $3.7303, which serves as immediate support. A decisive break below this level could expose the September 19 low at $3.410, potentially extending the selloff.
Momentum indicators also favor the bears. The Relative Strength Index (RSI) on the daily chart is near 38, approaching oversold territory. While this indicates intense selling pressure, it also raises the possibility of a short-term relief bounce if buyers step in. Meanwhile, the Moving Average Convergence Divergence (MACD) remains firmly negative, confirming that bearish momentum is still dominant.
Potential recovery scenarios
On the upside, a rebound from the descending channel's lower boundary could see NEAR retest $3.9160, a former support level that has now turned into resistance. A stronger recovery could push the token toward $4.3010, although buyers would need to overcome persistent selling pressure to sustain such a move.
Despite the positive governance development and the reduction in token issuance, NEAR's immediate technical outlook remains bearish. Unless the token reclaims its nearby resistance levels, the risk of another decline toward $3.410 remains high.
This article is for informational purposes only and does not constitute financial advice.
