- NEAR Protocol’s native token surged by 50% in a month due to the implementation of sharding, strategic AI partnerships, and increased network activity.
- These advancements have positioned NEAR for long-term growth and heightened interest in the market.
The NEAR token, native to the Near Protocol, has been on an impressive uptrend, trading at $5.21 after a 2.3% increase in the last 24 hours. Following a dip to $3.41 on September 6, NEAR surged by 57%, hitting an eight-week high of $5.36 on September 24. Here’s a look at the factors driving this significant rise:
1. Implementation of Blockchain Sharding
Near Protocol, renowned for its interoperability and rapid transaction speeds, has successfully implemented sharding on its network. This major update, part of the NEAR 2.0 upgrade on August 12, makes Near Protocol the second blockchain after Elrond (EGLD) to achieve sharding in production. Sharding enhances scalability and security without compromising decentralization, solving the notorious blockchain trilemma. This technological advancement positions Near Protocol for long-term growth as the demand for decentralized applications (DApps) increases. Compared to Ethereum, Near Protocol offers a faster, more scalable solution with lower transaction fees, largely thanks to sharding.
2. Strategic Partnerships and AI Momentum
The NEAR token’s price has also benefited from strategic partnerships, notably between Nvidia and Alibaba Cloud, aimed at advancing the autonomous driving industry in China. AI-themed crypto tokens like NEAR typically react positively to significant announcements from Nvidia, a trend that continued with this partnership. Additionally, U.S. Democratic presidential candidate Kamala Harris recently expressed support for an “opportunity economy” for AI and digital assets, marking her first public endorsement of the crypto industry. This political backing has further fueled investor optimism around AI-related tokens, including NEAR.
3. Increased Network Activity and Total Value Locked (TVL)
The past month has seen a notable increase in network activity on the Near Protocol, with daily transactions rising by 42% from August 25 to September 24, according to NearBlocks.io. The number of new addresses on the platform also grew by 30.8% during this period, reflecting increased adoption. This surge in activity has translated into higher user engagement and a significant rise in the total value locked (TVL) on the Near Protocol. Data from DefiLlama shows a 34% increase in TVL, from $183.7 million on September 7 to $246.5 million on September 24, indicating heightened interest and activity within the NEAR ecosystem.
Moreover, derivatives data from CoinGlass reveal that NEAR’s open interest (OI) increased from $114.9 million on September 7 to $279.2 million on September 24, the highest level since June 7. This rise in OI suggests an influx of new money into the market and a wave of new buying activity.
Strengthening Market Structure Points to Further Upside
NEAR’s recent uptick broke above the descending trendline on September 23, closing above major moving averages like the 50-day EMA at $4.40, the 100-day EMA at $4.75, and the 200-day EMA at $4.87. These averages had acted as resistance since mid-June. The relative strength index (RSI) at 70 indicates that buyers currently dominate the NEAR market. Bulls are now aiming to push the price higher towards $6 and potentially to the range high of $6.45.
However, a daily close below the 50-day EMA at $4.40 could invalidate the bullish outlook, potentially leading to a 32% decline to retest the September 6 low of $3.50.
NEAR’s substantial growth over the past month can be attributed to technological advancements like sharding, strategic partnerships, and increased network activity, all contributing to a robust market structure poised for further gains.
