At the time of writing, NEAR Protocol (NEAR) is trading around $2.14, facing an important retest at the downtrend resistance after forming a clear double bottom at $1.85.
This setup often signals a depletion of momentum and a potential bullish reversal, especially when trading volume shows signs of improvement. However, to confirm the uptrend, NEAR needs to decisively break this resistance level. If it fails, the reversal scenario will be invalidated, putting NEAR at risk of a deeper correction.
Traders are pouring into Long positions.
Data from Binance on July 4th shows that market sentiment is strongly leaning towards Long positions. The Long account ratio reached 72.19%, pushing the Long/Short Ratio up to 2.60 – quite a significant difference. This reflects a strong expectation that NEAR will soon break through the downtrend resistance.
However, when the optimism spreads too much, liquidity risks may arise. If the price cannot break through as expected, this high leverage structure could lead to a series of forced liquidations, causing the price 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 at this moment.
In the past, sustained positive sentiment often 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 the price moves sideways, it could be a signal that NEAR has reached a short-term peak.
Rising Funding rate: Solid confidence or is the market too hot?
On July 4th, the Funding rate on Binance turned positive at +0.01%, indicating that Long positions are paying fees to Short positions – a sign supporting the upward 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 breakthrough, the risk of being 'squeezed' will increase. Currently, this data shows that the spreading optimism in the market is entirely justified, but investors need to closely monitor spikes in the Funding rate, as these could be signals of trend exhaustion.
Why is the outflow of $2.22 million from the exchange an important signal?
On July 4th, 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, providing a more solid foundation for price breakout efforts. However, if money flows back into the exchange, it will be a negative signal, weakening the bullish scenario.
Long liquidation: A warning signal of excessive confidence?
Despite the increasing optimism, liquidation data shows that Long positions were wiped out by $269,990 on July 4th, compared to $6,190 for Short positions. This large discrepancy indicates that many investors entered Long positions too early and were caught in a local pullback.
Although not leading to severe consequences, this event reflects the fragility of the current uptrend. If imbalanced liquidations continue, market sentiment may be affected, causing subsequent breakouts to be delayed.
Can the bulls turn resistance into support?
NEAR's bullish reversal setup is currently supported by positive sentiment and overwhelming Long pressure. However, unconfirmed signals such as increasing liquidations and prices not breaking resistance are points that make the market cautious.
If NEAR clearly breaks out of the downtrend line, along with continued outflows from exchanges and stable Funding rates, the bullish scenario will be reinforced.
Until that happens, the market is still waiting in the critical decision zone.