• NEAR trims gains and holds above $2.50 on Wednesday amid broader profit-taking activity.
• NEAR derivatives market loses momentum, with perpetual futures Open Interest falling to $747 million.
• NEAR momentum indicators remain overextended, suggesting that further cooling may be imminent.

Near Protocol (NEAR) edges lower on Wednesday, holding above the $2.50 support. The drawdown can be partly attributed to broader crypto market volatility as investors continue to assess geopolitical tensions in the Middle East and to profit-taking following its over 100% rally in May.

NEAR Protocol falters as demand softens

Retail demand for NEAR derivatives is shrinking, as reflected by the drop in perpetual futures Open Interest (OI) to $747 million on Wednesday from $857 million the day before.

The drawdown coincides with the current correction, which has seen NEAR test support at $2.50, down from its yearly peak of $2.97. Further decline in OI suggests investors are losing confidence in the token’s short to medium-term outlook and are unwilling to open new positions.

Notably, traders are increasingly piling into long positions in NEAR, as evidenced by the OI-Weighted Funding Rate holding in positive territory around 0.0245%. This shows that interest in NEAR remains relatively high, possibly due to the narrative around Artificial Intelligence (AI) tokens. If funding rates remain unchanged, an increase in buy-the-dip demand could bolster NEAR’s bullish outlook.

Price analysis: NEAR tests short-term support

NEAR trades at $2.55, extending a strong bullish phase after reclaiming and accelerating away from its key moving averages. The spot price stands well above the 50-day, 100-day and 200-day Exponential Moving Averages (EMAs), which fan out to the downside and suggest a firmly supportive underlying trend, while the SuperTrend line at roughly $2.05 reinforces this structural floor.

Momentum remains positive, with the Moving Average Convergence Divergence (MACD) indicator holding in positive territory and its histogram elevated, although the Relative Strength Index (RSI) near 75 hints at overbought conditions that could favor consolidation or a corrective pause rather than immediate continuation.

On the downside, initial support is located around the SuperTrend level at $2.05, where prior breakout dynamics could encourage dip buying on a pullback. Below that, a cluster of medium and long-term supports emerges at the 50-day EMA near $1.67, the 200-day EMA close to $1.66, and the 100-day EMA around $1.55, levels that would be expected to attract stronger demand if a deeper correction unfolds, keeping the broader bullish structure intact while above them.

(The technical analysis of this story was written with the help of an AI tool.)