Near Protocol has spiked by close to 20% in the last 3 days, sparking speculations that it could be up for an elongated rally. However, a quick look at price action suggests that the overall sentiment is still bearish as NEAR’s price remains within a descending channel.
This pattern has restricted its price movement to a downtrend, forming lower highs and lower lows since May. If this continues, we could see NEAR drop by more than 30% to form a new lower low.
However, for a breakthrough, Near Protocol will have to break out from the top of the descending channel pattern, which has consistently served as resistance over the past five months. Breaking this could bring in bullish pressure as users seek to exploit the buying opportunity.
How Likely Is a Breakout from the Descending Channel Pattern
Now that the price has reached the resistance again, how likely is it to break out?
The Relative Strength Index (RSI) is at 57, showing that the price has a lot of room to run in case of increasing bullish momentum. This metric supports further price growth as bulls may be more confident to push the price up since a retracement may not be near.
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The 50-day Simple Moving Average (SMA) is currently serving as support for the price, indicating that buyers are in control in the short term. However, the medium-term 100-day SMA is above the price, just at the strong resistance point.
These two indicators are showing mixed pictures, with the RSI suggesting there’s room to run in case of bullish momentum. The 50-day SMA is also supporting further price growth, while the 100-day SMA could potentially act as resistance.
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