NEAR, the native token of the Near Protocol, continued its uptrend after rising by 2.3% over the last 24 hours to trade at $5.21.
Data from Cointelegraph Markets Pro and TradingView show that after falling to a Sept. 6 low at $3.41, NEAR climbed by 57% to establish an eight-week high at $5.36 on Sept. 24.
NEAR/USD daily chart. Source: TradingView
Some of the factors contributing to NEAR’s growing strength include the implementation of blockchain sharding on the Near Protocol, it’s increasing open interest in futures markets, a rising total value locked (TVL), and a strengthening market structure.
Near Protocol implements sharding
Near Protocol, a community-run cloud computing platform focused on interoperability and lightning-quick transaction speeds, has implemented sharding on its network.
According to the project, sharding solves the blockchain trilemma by offering scalability and security without compromising decentralization.
Source: Justin Bons
The platform achieved this following a NEAR 2.0 update on Aug. 12, making NEAR the second chain to achieve sharding in production after Elrond (EGLD).
Implementing sharding has positioned Near Protocol for steady, long-term growth as the demand for decentralized applications (DApps) grows.
Compared to Ethereum, Near Protocol offers a faster and more scalable option with lower transaction fees, and sharding plays a crucial role in this efficiency.
NEAR’s price performance can also be attributed to the latest partnership between Nvidia and Alibaba Cloud, which aims to improve the autonomous driving industry in China.
AI-themed crypto tokens, including NEAR, react positively to major Nvidia announcements, and this time was no different.
Another catalyst for AI-related tokens came from Democratic presidential candidate Kamala Harris who hinted at creating “an opportunity economy” for AI and digital assets in the United States. This was the first time that Harris publicly shared her stance on the crypto industry.
Onchain data supports NEAR’s price surge
Increased network activity and network growth preceded NEAR’s price performance over the last month. This is a result of increased activity brought by the growing adoption of projects on the NEAR Protocol which has seen the daily transaction count on the platform increase by 42% between Aug. 25 and Sept. 24, per data from NearBlocks.io. Similarly, the number of new addresses increased by 30.8% over the same period, attesting to the increasing adoption.
Daily number of transactions on Near Protocol. Source: NearBlocks.io
The growth in network activity has led to increased user engagement with the network, leading to increase in the total value locked (TVL) on the platform. According to data from DefiLlama, the TVL on the Near Protocol has increased by 34% from $183.7 million on Sep. 7 to $246.5 million on Sept. 24.
Total value locked on the Near Protocol. Source: DefiLlama
Increasing TVL indicates growing activity and interest within the Near Protocol ecosystem. It implies that more users are depositing or utilizing assets within NEAR-based protocols.
In addition, derivatives data tracker Coinglass shows that NEAR’s OI increased from $114.9 million on Sept. 7 to $279.2 million on Sept. 24, the highest level since June 7. This rise indicates that new or additional money is entering the market and new buying is occurring.
NEAR open interest. Source: Coinglass
Related: OpenAI’s press account hack was 5th security breach in 20 months
NEAR’s strengthening market structure points to further upside
NEAR’s uptick saw it break above the descending trendline on Sept. 23. It also closed above all the major moving averages including the 50-day exponential moving average (EMA) at $4.40, 100-day EMA at $4.75, and the 200-day EMA at $4.87, which acted as barriers since mid-June.
The value of the relative strength index at 70 suggests that the buyers are in control of the NEAR market.
The bulls will now focus on pushing the price higher toward $6 and possibly the 19 range high at $6.45.
NEAR/USD daily chart. Source: TradingView
Conversely, a daily candlestick close below the 50-day EMA at $4.40 would create a lower low on the daily chart, invalidating the bullish thesis. The bears could then pull NEAR’s price decline by an additional 32% to retest its Sept. 6 low of $3.50.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.