NEAR Eyes Potential Reversal as It Tests Key Support Within a Descending Channel

• NEAR is testing key support between $3.70-$4.30 within a descending channel, with potential to drop to $2.62 if bearish momentum continues.
• The death cross of MA50 below MA200 in May reinforces bearish momentum, as NEAR remains unable to break key resistance levels.
• Diminishing trading volume indicates indecision in the market, with no significant buying pressure emerging to counter the downtrend.

NEAR Protocol’s price has been in a consistent downtrend, and it is currently testing crucial support levels within a descending channel.Currently trading around $3.89, the token has fallen below its previous dynamic support, leaving the market in a downtrend. Technical indicators suggest that NEAR may retest lower support levels if this bearish momentum continues.

Price Action within the Channel

The price of NEAR is moving in a defined descending channel, with resistance and support zones clearly visible. Notably, the upper boundary of the channel represents where price rejections have occurred, while the lower boundary marks where the token has consistently found support. The key support zone between $3.70 and $4.30 is currently being tested, and this area is crucial in determining whether the price will maintain some level of upward movement.

Breaking below the channel would likely result in NEAR testing the next support level of $2.62. However, if the price holds at the current support zone and bounces back, a potential breakout from the channel could indicate a reversal in the ongoing downtrend. Traders are keenly watching how NEAR will respond in this zone.

Moving Average Trends and Bearish Momentum

Further supporting the downward trend, the interaction between the 50-period moving average (MA50) and the 200-period moving average (MA200) reveals critical developments. In early May, a death cross formed as the MA50 crossed below the MA200, signaling bearish momentum. Since then, NEAR has been unable to regain upward momentum, continuing to trade below both moving averages.

Source: Santiment

The price has struggled to break above the MA50, with this level acting as dynamic resistance. The gap between the two moving averages continues to widen, indicating ongoing downward pressure. If NEAR remains below these key levels, further price decline may be imminent.

Lower Volume and Market Indecision

The market currently displays lower trading activity, as indicated by diminishing volume. This slowdown suggests possible indecision, with traders potentially waiting for a clearer direction before taking significant positions. Additionally, while the Relative Strength Index (RSI) suggests the token may be in oversold territory, no clear buying momentum has emerged to counter the existing bearish trend.

The technical setup for NEAR reveals a bearish market struggling to break key resistance levels. The potential for further downside remains significant, particularly if the price continues to trade below the descending channel and moving averages.