NEAR’s price surges – But will sell-offs derail its rally?

Key Takeaways

What is driving NEAR Protocol’s recent market performance?

NEAR’s recent surge is largely driven by a $19.52 million increase in its total value locked (TVL) and rising decentralized exchange (DEX) trading volume.

How are NEAR’s spot and on-chain activities impacting its price?

While on-chain activities show bullish momentum, the rising spot sell-off suggests a bearish trend, potentially weighing on NEAR’s price outlook.

NEAR Protocol [NEAR] led the market in gains after recording a massive liquidity inflow, largely driven by on-chain users.

Market sentiment continues to indicate the possibility of a further rally, but the spot segment of the market has failed to align with this move and continues to see further price decline.

On-chain volume rises

Trading activities on-chain have been at their highest in the past day.

According to DeFiLlama, there has been a simultaneous surge in the Total Value Locked (TVL) of NEAR Protocol alongside its decentralized exchange (DEX) trading volume.

From the 7th of September to press time, the TVL in NEAR rose from $91.71 million to a new peak of $111.23 million. 

This $19.52 million increase highlights a notable uptick in the amount of NEAR tokens staked during that period.

Source: DeFiLlama

The DEX volume also recorded notable growth, rising to a new high of $62.35 million, the highest level since the 23rd of August.

This implies that more trading activities have been ongoing in the market. In the past two weeks, NEAR has gained 17%, confirming ongoing accumulation within this period.

Technical indicators support trend

The bullish momentum in the market is supported by technical indicators such as the Average Directional Index (ADX) and the Chaikin Money Flow (CMF).

At press time, the CMF has seen a major climb to 0.26 in the past day. Typically, when the CMF is positive and trending upward, it confirms that the market is dominated by buyers and that trading volume remains high.

Source: TradingView

The same sentiment is mirrored by the ADX, which measures whether a trend is strong or weak.

When the ADX trends upward alongside price, it confirms that the trend is highly bullish. This is the case with NEAR, as both price and ADX have been moving in parallel.

The growing bullish sentiment continues to strengthen the overall price outlook and supports the possibility of NEAR’s next upward move.

Spot offload strongly

Despite these gains in the market, there has been a notable surge in the amount of NEAR sold on exchanges.

In the past 48 hours, the amount of NEAR offloaded on spot markets has risen significantly.

On the 18th of September, investors sold $6.94 million worth of NEAR, and the latest data today shows that the sell-off reached $2.90 million.

Source: CoinGlass

This brings the total 48-hour sell-off to $9.64 million. Typically, a one-day sell-off implies traders are likely taking profit, but two consecutive days of strong sell-offs suggest the emergence of a bearish trend.

If the bearish spot sell-off continues, it could weigh heavily on NEAR’s price outlook. However, counter inflows from on-chain investors may still reflect positively on price movement.