NEAR Protocol Forecast: Decline continues despite approval of House of Stake issuance cut

• A 10% fall the previous day leaves NEAR Protocol below $4 as losses deepen on Tuesday.
• A proposal to lower annual issuance wins approval from House of Stake, NEAR’s decentralised on-chain governance body.
• Mounting selling pressure leaves NEAR’s technical outlook tilted to the downside.

Below $4 on Tuesday, NEAR Protocol (NEAR) remains under pressure after losing 10% the previous day and declining for three consecutive weeks. On Monday, House of Stake, NEAR’s decentralised on-chain governance body, approved a proposal to cut annual issuance, reducing long-term inflation and supply growth. With sellers driving momentum, the technical picture points to further losses for NEAR.

NEAR Protocol moves to strengthen tokenomics

Under the HSP-029 proposal approved by NEAR Protocol’s governing body, House of Stake, maximum annual token issuance will fall in stages from 2.5% to 1.6% over 24 months. Implementation requires a Security Council review, a 90-day grace period and a protocol upgrade for validators. The decision will reduce long-term inflation and supply growth programmatically.

Retail interest begins to recover

After a modest contraction, retail interest in NEAR Protocol is showing signs of recovery. On Tuesday, NEAR futures open interest stood at 266.81 million NEAR tokens, compared with 246.27 million the previous day, according to CoinGlass. The increase marks a sharp rebound in the build-up of new positions, interrupting the broader decline from the 25 October high of 302.69 million NEAR tokens. Nevertheless, rising OI alongside a falling spot price suggests traders expect further volatility.

Technical outlook: NEAR remains vulnerable to further losses

At the time of writing on Tuesday, NEAR trades at $3.8270, with the four-hour chart signalling a bearish reversal. A clear downside bias persists as the price remains beneath the 50- and 200-period Exponential Moving Averages (EMAs), at $4.3677 and $4.5235 respectively. The 50-period EMA has also crossed below the 200-period EMA, reinforcing the bearish shift in the near-term trend.

On the same chart, two closely spaced parallel trendlines contain NEAR’s decline within a falling channel. The price is nearing the channel’s lower boundary at around $3.7303. This trendline provides support ahead of the $3.4030 horizontal level established by the 19 September low.

The momentum indicators also suggest that selling pressure remains dominant. On the four-hour chart, the Relative Strength Index (RSI) is hovering around 26 in oversold territory, while the Moving Average Convergence Divergence (MACD) remains deep in negative territory.

If the price rebounds from the supporting trendline, it could test former support at $3.9160, now acting as resistance, before approaching $4.3010.

(An AI tool assisted in preparing the technical analysis for this article. Learn more.)