The Near Protocol (NEAR) price has increased significantly since falling to a new yearly low on June 10. Despite this increase, it has not confirmed its bullish reversal yet.
The NEAR price is trading in proximity to a crucial confluence of resistance levels. So, the reaction to it will be crucial in determining if the future price trend is bullish or bearish.
Near Protocol Price Creates Bullish Pattern After Yearly Low
The NEAR price fell to a new yearly low of $1.14 on June 10. While this initially seemed to cause a breakdown, NEAR bounced almost immediately afterward and recovered, validating the $1.20 horizontal area as support.
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Therefore, the previous decrease is only a deviation. This is considered bullish price action since sellers were unable to sustain the drop. Rather, buyers took over and pushed the price upward.
The price movement also created a double bottom, which is considered a bullish pattern. When coming after a downward movement, it often leads to bullish trend reversals.
Moreover, the weekly RSI gives a bullish reading. Market traders use the RSI as a momentum indicator to identify overbought or oversold conditions and to decide whether to accumulate or sell an asset.
Readings above 50 and an upward trend indicate that bulls still have an advantage, whereas readings below 50 suggest the opposite or neutral reading. Even though the RSI is below 50, it is increasing and has generated a bullish divergence.
A bullish divergence occurs when a momentum increase accompanies a price decrease. It is a rare occurrence in the weekly time frame and often leads to bullish trend reversals. In fact, it is the first time in NEAR’s price history that such a divergence has existed. This aligns with the presence of a double-bottom pattern.
NEAR Prediction: Can Price Clear Crucial Resistance?
Even though there are bullish signs in the weekly time frame, the daily one does not yet confirm the bullish trend reversal. The main reason for this comes from the price action.
Despite a significant increase since the yearly low, the price is struggling at a confluence of resistance levels at $1.55. The $1.55 horizontal resistance area and the middle of a descending parallel channel (red circle) create the resistance.
Since the $1.55 area previously provided support, the price must reclaim it in order to confirm the bullish reversal.
However, since the descending parallel channel is considered a corrective pattern, an eventual breakout from it is the most likely scenario.
Moreover, the daily RSI provides a bullish reading. The indicator is increasing, is above 50, and has broken out from a descending resistance line (black). All these are considered bullish signs that usually lead to upward movements.
Therefore, the future NEAR price prediction is still undetermined. It will be crucial to forecast whether the price breaks out from the $1.55 area or gets rejected. A successful breakout will mean that a bullish reversal has begun, and the NEAR price will break out from its channel, moving to the next resistance at $2.45.
However, a rejection could cause a drop in the channel’s support line and a new yearly low.
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