At the time of writing, NEAR Protocol (NEAR) is trading around $2.14, facing an important retest at the resistance of the downtrend line after forming a clear double bottom at $1.85.
This setup often signals a loss of momentum and the potential for a bullish reversal, especially when trading volume shows signs of improvement. However, to confirm the bullish trend, NEAR needs to decisively break this resistance level. If it fails, the reversal scenario will be invalidated, pushing NEAR into the risk of a deeper correction.
Traders pouring into Long positions
Data from Binance on July 4 shows that market sentiment is strongly leaning towards the Long side. The Long account ratio reached 72.19%, pushing the Long/Short Ratio up to 2.60 – a significant disparity. This reflects a strong expectation that NEAR will soon break through the resistance of the downtrend line.
However, when optimism spreads too far, liquidity risks can emerge. If the price cannot break out as expected, this high leverage structure could lead to a series of forced liquidations, causing prices to drop sharply again.
Investor sentiment is recovering
According to data from Santiment, the Weighted Sentiment indicator has surged to +0.427 after several days lingering in negative territory. This indicates that market confidence has returned, at least for the moment.
In the past, sustainable positive sentiment has usually supported price increases, but short-term emotional spikes often lead to reversals. Therefore, to maintain the upward momentum, the sentiment index needs to remain high. If this index declines while prices move sideways, it could signal that NEAR has peaked in the short term.
Funding rate increases: Strong confidence or is the market too hot?
On July 4, the Funding rate on Binance turned positive at +0.01%, indicating that the Long side is paying fees to the Short side – a sign supporting the bullish trend. However, this Funding rate remains modest, reflecting controlled participation and not excessive speculation.
However, if this ratio continues to rise sharply without a price breakout, the risk of being 'squeezed' will increase. Currently, this data shows that the spreading optimistic sentiment in the market is entirely justified, but investors need to closely monitor spikes in the Funding rate, as they could signal exhaustion of the trend.
Why is the outflow of $2.22 million from the exchange an important signal?
On July 4, NEAR recorded a net outflow of $2.22 million from exchanges, indicating that investors are actively holding and not ready to sell.
If this trend continues, short-term selling pressure will decrease, creating a stronger foundation for price breakout efforts. However, if the money flow reverses back to the exchange, that would be a negative signal, weakening the bullish scenario.
Liquidating Long positions: A warning signal of excessive confidence?
Despite the increasing optimistic sentiment, liquidation data shows that the Long side was wiped out by $269,990 on July 4, compared to $6,190 on the Short side. This large discrepancy indicates that many investors entered Long positions too early and got caught in a local pullback.
Although it does not have overly severe consequences, this event reflects the fragility of the current bullish trend. If the imbalanced liquidations continue, market sentiment could be affected and subsequent breakouts delayed.
Can the bulls turn resistance into support?
The bullish reversal setup of NEAR is currently supported by positive sentiment and overwhelming Long force. However, unconfirmed signals such as increasing liquidations and prices not breaking resistance are points that the market needs to be cautious about.
If NEAR clearly breaks out of the downtrend line, along with continued outflows from the exchange and stable Funding rates, the bullish scenario will be reinforced.
Until that happens, the market is still waiting in the crucial decision zone.