NEAR Protocol [NEAR] faces decline, yet a bullish trend persists

NEAR Protocol [NEAR] has shown a bearish trend across various timeframes, experiencing a 6.00% decrease in the last month and a 7.85% drop in the past week.

Currently, NEAR is in a downward trend, with a 1.82% decline in the last 24 hours.

Although there might be a minor recovery that could help NEAR maintain its position within the consolidation phase, the likelihood of a significant upward movement remains uncertain.

Anticipated Decline for NEAR

NEAR has been trading in a consolidation phase between $5.005 and $4.561 since October 2nd. While consolidation typically signals accumulation, in NEAR’s case, it suggests an impending distribution.

Should this distribution phase take place, NEAR might target two potential price levels: initially at $3.833, and if selling pressure persists, a further drop to $3.494.

If the anticipated distribution scenario does not materialize, NEAR is likely to stay within its current trading range. Therefore, other onchain metrics are being examined to predict NEAR’s next market movement.

Concerns Arise as Trader Loss Imbalance Points to Active Sellers

Coinglass reports a significant imbalance between short and long liquidations in the last 24 hours, with $388.22k worth of NEAR liquidated, of which $377.36 thousand came from long positions, while only $10.86 thousand was attributed to short positions.

This imbalance suggests a downward trend, as the side with fewer liquidations—short traders in this case—tends to dictate market direction.

Furthermore, the Weighted Funding Rate has decreased significantly, indicating that short positions are outstripping long positions amidst prevailing bearish sentiment.

The Weighted Funding Rate represents the average funding rate across exchanges, adjusted for the size of Open Interest, reflecting the cost associated with holding long or short positions in perpetual futures contracts.

If bearish traders continue to dominate the liquidation imbalance and the Weighted Funding Rate keeps dropping, NEAR could see further declines from its current trading range.

Modest Signs of Potential Recovery

Amid the prevailing bearish sentiment, there is a chance for NEAR to rebound from the support level within the consolidation channel, expanding its trading range within this channel.

This potential resurgence is indicated by the formation of Parabolic SAR dots below NEAR’s price, signaling a bullish market outlook.

This indicates that some traders are actively purchasing NEAR at the current levels.

Should these dots persist, NEAR could maintain its position within the consolidation phase and potentially break out from it if market sentiment shifts positively.