The Promising Future of Near Protocol for Q1 2025
The decentralized finance (DeFi) sector within the Near Protocol ecosystem has witnessed an impressive surge of 150% in its overall value. This remarkable growth can be attributed to the optimistic market sentiment following the U.S. elections in November, contributing to a substantial 156% increase in NEAR Protocol’s network growth over the past year.
According to Messari’s recent report, the total locked value (TVL) of the chain’s DeFi sector soared from under $100M at the end of Q3 2024 to $240M by the last quarter, demonstrating a significant rise in investor interest and confidence.
Despite the notable growth, the DeFi TVL experienced a minor slowdown in the last quarter, mirroring the mixed price performance of NEAR during the same period. For instance, while NEAR’s price surged by 160% in the first half of 2024, it faced a downturn during the summer months, only to recover post-U.S. elections with a 72% gain.
However, a December sell-off led to a reversal of the gains made post-U.S. elections, causing NEAR to plummet to its lowest point of $3 in 2024 after a 60% decline. This begs the question: what might speculators expect in Q1 2025?
An Outlook on NEAR for the First Quarter of 2025
One factor that may have contributed to NEAR’s losses in early 2025 is the bursting of the AI bubble, driven by the emergence of competitors like DeepSeek, a Chinese AI chatbot offering low-cost solutions.
Similar to other blockchain networks, NEAR’s price has shown a strong correlation with daily active addresses and decentralized exchange (DEX) volumes. During periods of market rallies, these metrics surged, only to decrease during market downturns.
Notably, the decline in NEAR’s price from $8 to $3 coincided with a gradual decrease in both daily active addresses and DEX volumes. As of the latest data, these two metrics have not displayed a definitive recovery, suggesting that NEAR’s performance may remain subdued, especially amid ongoing macroeconomic uncertainties.
Nevertheless, a closer look at the weekly timeframe chart reveals a potential bottom formation around the $3 mark. Interestingly, NEAR has previously rebounded from this level in March, August, and November of 2024. Should history repeat itself, NEAR could target an immediate recovery to $4.7 or $5.
However, a breach below the support level might pressure the altcoin further, potentially pushing it towards $2.