Near Protocol (NEAR) Joins the Crypto Sell-Off after a Bullish Sunday

Key Insights:

• NEAR Protocol (NEAR) rallied by 7.2% on Sunday to buck the broader market trend.
• A surge in total value locked (TVL) supported the upward trend, with NEAR’s TVL striking an ATH of $605.89m this morning.
• Technical indicators are bearish, with NEAR sitting below the 50-day EMA.

On Sunday, NEAR bucked the broader crypto market trend, rallying by 7.2%. Reversing a 3.15% decline from Saturday, NEAR ended the week down 5.66% to $11.16.

A 13.5% slide on Thursday did the damage, as market risk aversion spilled over from the US equity markets.

Despite the modest weekly loss, NEAR has lost significant ground in April, falling back from an April high of $19.32 to an end-of-April month low of $10.08.

On Saturday, NEAR tested support at sub-$10.00 with a low of $9.86 before finding support.

Avoiding sub-$9.00 and a February 24 current-year low of $8.21 will remain key near-term.

New Address Counts and Total Value Locked Delivers NEAR Support

A surge in total value locked delivered support on Sunday and continues to deliver support at the start of the week.

According to Defi Llama, NEAR’s total value locked jumped to an All-Time-High of $605.89 this morning before easing back. The upswing continued from May 7, when the TVL stood at $483.35.

Over the last 24-hours, the TVL is up 3.14%, with Ref Finance dominance standing at 43.41%.

NEAR Protocol’s market cap is up 3.3% to $7.52bn since May 7, according to CoinMarketCap. Considering a TVL surge of 23.8% over the same period, divergence suggests more price support for NEAR in the coming days.

On December 31, 2021, NEAR’s TVL stood at $136.61m.

Another positive for NEAR is the upward trend in new addresses. According to Coin98 Analytics, NEAR has the highest address growth this year. New addresses are up 212% to 6,867,647. Crypto.com (CRO) ranked second, with new address growth of 166%.

#Ethereum/#BNBChain/ #Polygon have the highest total addresses#NEAR and #Cronos have the highest address number growth pic.twitter.com/N7yEx6yET7

— Coin98 Analytics (@Coin98Analytics) May 1, 2022

 

The upward trend in new addresses reflects community support for the protocol.

What is Total Value Locked, and Why Does it Matter?

The total value locked is the value of crypto assets deposited in a DeFi protocol. In recent months, TVL has drawn significant interest. Traders consider the TVL a key metric in measuring market interest and native token value.

The market will be looking for divergence between the TVL and the market cap of a token. Buying or selling opportunities present themselves at times of greatest TVL and price divergence.

NEAR Price Action

At the time of writing, NEAR was down by 2.51% to $10.88. A mixed start to the day saw NEAR strike a morning high of $11.66 before falling to a low of $10.69.

Technical Indicators

NEAR will need to move through the $10.76 pivot to make a move through the First Major Resistance Level at $11.65.

Broader market sentiment would need to improve to support a return to $11 levels.

In the event of another extended rally, NEAR should test the Second Major Resistance Level at $12.15 and resistance at $12.5. The Third Major Resistance Level sits at $13.54.

Failure to move through the pivot would bring the First Major Support Level at $10.26 into play. Barring an extended sell-off throughout the day, NEAR should avoid sub-$9.5. The Second Major Support Level sits at $9.37.

The EMAs and the 4-hourly candlestick chart (below) send a bearish signal. NEAR currently sits below the 50-day EMA at $14.31. This morning, the 50-day EMA pulled back from the 100-day EMA. We also saw the 100-day EMA fall back from the 200-day EMA; NEAR price negative.

NEAR would need to move through the 50-day EMA and return to $12 to support an extended breakout.