NEAR Protocol [NEAR] has managed to stage a short-term recovery. This comes after its price action took a big hit during the recent security scare that threatened the confidence of investors.
After the vulnerability issue, NEAR Intent was reported to halt its services from the project. The incident resulted in investors losing $3.8 million worth of funds. As a result, NEAR experienced some selling pressure due to the negative news as its price action recorded a significant drop.
However, investor sentiment has shown signs of recovery as NEAR Protocol, in a recent post, revealed that the security issue was separate from the protocol itself.
Retail traders drive the rebound
The recovery has been fueled primarily by retail market activity.
According to the recent retail activity, retail orders continue to flock to the network. The direct impacts are already being felt on the token’s price action.
Technically, on the hourly price chart, NEAR has posted seven consecutive hours of gains. It reclaimed the 20-day and 50-day Exponential Moving Averages (EMAs) in the process.
In other words, the steady climb suggests short-term sentiment has improved following the protocol’s clarification, with retail demand appearing to be doing most of the heavy lifting.
Long-term sentiment remains cautious
Despite the bounce, NEAR’s long-term indicators still spark bearish signals. The network’s open interest continues to shrink alongside its trading volume, which has yet to return to the levels seen before the exploit announcement.
The token’s trading volume has declined by 10% to $1.52 billion over the last 24 hours as of writing. Going hand in hand, its Open Interest (OI) shrunk by 9% to $265 million. Such readings indicate that institutional traders and leveraged participants remain cautious despite the improvement in price action.
Without a meaningful recovery in these metrics, the latest rally could struggle to develop into a sustained uptrend.
Can NEAR build on the recovery?
With the clarification of the protocol, all immediate worries regarding the exploit have been addressed, helping the buyers take control for the time being.
Nevertheless, the markets have not yet recovered from the shock. Before the OI and the trading volumes start rising, this rally will have to gain strength by attracting more retail traders.
Moreover, the price of NEAR has stabilized above its EMAs, but more strength must come from elsewhere.
Final Summary
- NEAR has recovered after a sharp sell-off triggered by the recent security incident involving NEAR Intents.
- The token’s short-term rebound is majorly driven mainly by renewed retail participation, even as OI and trading volume remain subdued in the long run.