NEAR Protocol (NEAR): Is This Just the Beginning of a More Sustained Rally?

NEAR Protocol [NEAR], one of the standout altcoins in the crypto space, has captured investor attention once again with a significant surge in both price and activity.

As NEAR Protocol [NEAR] continues to garner attention with a recent 12% price surge, several questions arise regarding the sustainability of this rally. At press time, NEAR was trading at $4.47, amidst a backdrop of rising transaction volumes and heightened trader interest.

According to Binance, a striking indicator of NEAR’s market sentiment emerged with an astonishing 63% of traders opting for long positions, signaling a clear bullish bias. This shift in positioning suggests that investors anticipate the token’s price to ascend further, propelled by confidence in its underlying fundamentals.

Coin Market Cap revealed a massive surge in NEAR’s trading volume, with an increase of over 90%. Such parabolic volume gains typically indicate a buying frenzy, though they also raise concerns about the rally’s sustainability. Are these gains fundamentally driven, or does the price rise حاsuggest a speculative bubble that could burst?

Delving deeper into NEAR’s on-chain activity, data from Near Blocks reveals a promising outlook for the protocol’s long-term prospects. The protocol experienced a significant rise in daily transactions, reaching a two-week high of 7.33 million transactions. This marks a notable increase from just a week ago, when the transaction count stood at 6.7 million. Rising network engagement points to increasing demand for NEAR, as more users interact with the platform.

Moreover, new addresses joining the network also surged significantly. In early September, NEAR boasted around 687,000 new addresses, which later soared to an impressive 900,000 daily new addresses by mid-month. This influx of new users suggests growing interest and adoption, which could provide strong support for future price gains.

DApp activity also played a crucial role in NEAR’s growth, as evidenced by data from Dapp Radar. Decentralized applications (DApps) on NEAR contributed significantly to the increased transaction count. In fact, monthly DApp transactions on the protocol jumped by 14%, exceeding $182 million. This surge reflects NEAR’s growing appeal within the decentralized finance (DeFi) and blockchain ecosystems.

However, it’s worth noting that while DApp transactions increased, the overall volume of DApp transactions dropped by 54%. This decline could be attributed to fluctuations in NEAR’s price, as market volatility tends to impact the value of transactions on the network. Nonetheless, the rise in activity remained a positive sign of the network’s ongoing growth.

In the world of derivatives, NEAR also saw impressive gains. Open Interest (OI) for NEAR, which measures the total value of outstanding derivative contracts, reached $184 million, marking an eight-week high. This level of OI hasn’t been seen since late July, indicating that more traders are placing bets on NEAR’s future price movements.

The rise in Open Interest suggests that traders are increasingly optimistic about NEAR’s potential for further gains. Coin glass data showed that OI has been gradually increasing since early August, signaling that investors are opening new positions with the expectation of profiting from price increases.

Additionally, NEAR’s funding rates turned positive, reaching 0.0112%, which was the highest level since June. Positive funding rates indicate that traders were willing to pay a premium to hold long positions, further reinforcing the bullish outlook for NEAR.

Several factors contributed to the growing bullish sentiment around NEAR. One key driver was the explosive growth in the market for Big Data and AI cryptocurrencies, a sector where NEAR played a leading role. In the past month alone, the total market capitalization of AI and Big Data coins surged from $22 billion to $32 billion, according to Coin Market Cap.

As the largest AI-focused cryptocurrency, NEAR dominated over 15% of this market. Its strong position in a rapidly growing sector undoubtedly fueled optimism among investors. With the rise of AI and Big Data applications, NEAR was well-positioned to benefit from this emerging trend, which could provide further upward momentum for the token.

Despite the recent price surge and bullish on-chain signals, there were still risks to consider. The dramatic rise in trading volumes, while encouraging, could also حاsuggest potential volatility. If NEAR’s price growth was primarily driven by speculative trading, the rally may not be sustainable in the long run.

Furthermore, the decline in DApp transaction volumes suggested that while NEAR was seeing increased activity, it may not necessarily translate into higher network value. Investors would need to watch closely to see if NEAR could maintain its current momentum or if it faced a pullback in the coming weeks.

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