The price of NEAR Protocol (NEAR) has broken down below an important horizontal support level, but is showing some signs of a potential price increase. A recovery back to the horizontal support level could lead to a strong uptrend.
Key Support
The price of NEAR Protocol (NEAR) has been trading below the 20-week EMA ($2.13) since May 2022. This level has rejected the price multiple times and led to a low of $1.24.
The price has since rallied from the low and broke above the horizontal resistance level at $1.7, but was once again rejected by the EMA 20-week during February and again in April 2023 (red arrows). This is a bearish signal as the EMA 20-week is often used to determine long-term trends.
Subsequently, the price of NEAR has broken down below the $1.7 level, where it was expected to provide support after the breakout. Therefore, the price of NEAR may continue to decline to the yearly low of $1.24.
The RSI indicator supports this outlook when it is below 50 and sloping downwards.
Daily outlook
Despite the bearish signals from the weekly timeframe, the daily chart is showing some signs of a potential uptrend.
Firstly, NEAR price bounced off the minor support at $1.5 and formed a cluster of bullish pin bar candles, indicating strong buying pressure at lower levels.
Secondly, the RSI indicator has also bounced up from oversold territory and broken above the downtrend line, suggesting that the bearish momentum is weakening.
Therefore, NEAR price may retest the $1.7 support level and create a false breakout on the weekly timeframe. If that happens, it could surge towards the 20-week MA at $2.13.
Conclusion
The most likely prospect indicates that the NEAR price will recover to the $1.7 support level and then increase sharply. This view will be invalidated if the price breaks down below the $1.5 level.
