Key takeaways
Is there a divergence looming for NEAR?
NEAR’s on-chain activity is ramping up, but short-term price has yet to catch up.
Do the bulls or bears have the upper hand in the NEAR market?
A 17% share of all active L1 users suggests growing demand, although bear markets retain some control.
NEAR protocol (NEAR) extended its downward trend over the past 24 hours. In fact, the altcoin’s price fell 14% during this period as market volatility intensified across the entire crypto market.
And yet, despite the aforementioned drop, NEAR’s on-chain developments give reason for optimism.
Consider this – NEAR Intent recently hit a major milestone, recording an unprecedented $5 billion in processed volume – a sign that ecosystem activity has been robust, despite the latest market pullback.
NEAR Market Activity Defies Bearish Price Action
The network’s user base is also expanding. For example, the number of monthly active users on layer 1 blockchains has increased sharply recently. However, NEAR now represents almost 17% of all active L1 users.
NEAR ranks third among layer 1 tokens, with only Solana and BNB recording higher numbers.
At press time, the NEAR protocol network had 41.8 million users. The BNB channel leads with 56.5 million users, just ahead of Solana with 45.4 million users.
The aforementioned growth is a sign of the protocol’s growing adoption at a time when overall market sentiment has turned cautious.
Source: Token Terminal
Long-term price structure hints at potential reversal
On the contrary, the token’s short-term price reaction appears to highlight a clear disconnect. NEAR’s strong on-chain traction has not translated into short-term price action. In fact, sellers still seem to dominate.
The sharp daily decline could be a sign that traders may be prioritizing risk-averse moves over fundamentals. Especially as market liquidity decreases and volatility increases.
On the weekly chart, NEAR prices have been linked in consolidation phase since March this year. The altcoin price has been fluctuating between the $1.82 and $3.20 price levels for a long time.
At the time of writing, the price was approaching the $1.82 support zone after the last downtrend. However, the support level is more likely to hold given the favorable on-chain sentiments.
Source: TradingView
