Here, NEAR could grow by 34%

• NEAR Protocol price breaks above the downtrend line, following a rally ahead.
• On-chain data shows that NEAR’s open interest and TVL value are increasing, indicating new purchases and greater use of the blockchain.
• A daily close of the candlestick below $4.256 would invalidate the bullish thesis.

NEAR Protocol (NEAR) continues its gains on Tuesday after surging over 14% on Monday and breaking above the downtrend line. This bullish outlook is further supported by NEAR’s rising open interest and Total Value Locked (TVL), which suggest new acquisitions and greater blockchain usage are taking place, all pointing to a rally ahead.

The NEAR protocol is poised for a rally as it breaks above the downtrend line

The price near the protocol broke above the downtrend line (drawn by connecting multiple highs with a May 26 trendline) and rose 14.4% on Monday. It also closed above its 100-day exponential moving average (EMA) around $4.745, which had previously acted as a resistance barrier. Some pullbacks generally follow such a massive rally. At the time of writing on Tuesday, it is trading at around $5.199.

If NEAR bounces back, it could find support around the trendline breakout level and 100-day EMA around $4.745. At this level, lateral traders looking for buying opportunities can enter positions.

If this support holds, NEAR price could rise 34% from $4.745 to retest the daily resistance level at $6.354.

The Relative Strength Index (RSI) indicator on the daily chart shows that the NEAR protocol is approaching its overbought level of 70, which is currently trading at 68. If it enters the zone at the close, traders would be advised not to add to the level their. long positions, although the rally may continue. If it goes into overbought and then breaks back to the neutral 50 level, it will be a sign of a deeper correction.

NEAR/USDT daily chart

The on-chain data of the NEAR protocol further supports the optimistic thesis. Coinglass data shows that open interest (OI) of NEAR futures on exchanges is also rising. OI indicates the total number of outstanding derivative contracts that have not been settled (settled by delivery) and whether the cash flows in the contract are increasing or decreasing.

OI growth represents new or additional money entering the market and new purchases, suggesting an optimistic trend. Conversely, when OI falls, it is usually a sign that the market is liquidating, more investors are leaving and prices may fall.

The chart below shows that NEAR’s OI increased from $176.77 million on Friday to $266.88 million on Tuesday, the highest level since June 7. This increase indicates that new or additional money is entering the market and new purchases are taking place.

CLOSE UP The open interest graph

Crypto intelligence tracker DefiLlama also aligns with the bullish outlook. Data showed NEAR’s TVL rose from $199.28 million on Sept. 18 to $244.42 million on Tuesday, the highest since late July.

This 23% increase in TVL indicates growing activity and interest within the NEAR Protocol ecosystem. It suggests that more users deposit or use assets under NEAR-based protocols.

Next to the TVL chart

Even though chain metrics and technical analysis support the bullish view, if NEAR Protocol causes a daily candlestick to close below $4.256, the bullish thesis would be invalidated by creating a lower low on the daily chart. This development could see the price of NEAR fall another 10% to retest the September 17 low of $3.832.