After seeing a major sell-off at the beginning of the year, The Near Protocol (NEAR) appears to have fully recovered. In fact, the coin started to pair up losses well before the entire market rebounded and has since maintained this uptrend. Here are some details:
Since the end of February, NEAR has risen steadily in price.
The coin has breached various crucial resistance zones in the process.
But increased liquidation of long positions could spell doom for the altcoin.
Data Source: Tradingview
Near Protocol (NEAR) – Understanding the risks
The steady jump that NEAR has reported since the end of February has been quite impressive. The coin is now trading well above its 200- and 50-day simple moving averages, something that indicates bullish momentum.
In fact, NEAR is one of the few coins in the top 20 that has managed to breach the 200-day SMA. The RSI is also indicating that further upside is coming. The coin could surge past $20 in the days ahead. But despite this impressive uptrend, there is one thing that should get investors quite worried.
According to data provided by Coinglass, there has been a significant increase in liquidation for long positions. This essentially means that investors who had bought NEAR to hold it for a long period of time are already out of money. What is now left is a huge portion of short positions which are very prone to profit-taking. If this happens, which is quite frankly very likely, the uptrend NEAR has reported will slow significantly.
Why should you buy NEAR anyway?
Despite this downside risk, NEAR is still bullish, and it has a very good chance of posting more gains in the near term before any pullback. However, it would be best to lock in profits once the coin touches $20. This will still represent a net gain of around 25% from the current price.
The post This caveat should get investors worried as NEAR recovers sharply from 2022 low appeared first on Coin Journal.