NEAR Protocol, a blockchain network that experienced significant growth in its DeFi sector last year, has been on the radar of investors and traders alike. The network recorded a 156% surge in growth, with its DeFi Total Locked Value (TVL) reaching $240 million by the end of last quarter, a substantial increase from below $100 million at the end of Q3 2024.
The bullish market sentiment post-U.S. elections in November played a significant role in boosting investor interest and confidence in NEAR Protocol. However, despite the strong performance in the DeFi sector, NEAR’s price performance showed mixed results over the same period.
In the first half of 2024, NEAR’s price soared by 160%, only to face a downturn during the summer months. The price managed to bounce back post-U.S. elections, registering a 72% gain. Unfortunately, a December sell-off erased all the gains, dragging NEAR to its 2024 lows of $3 after a 60% drop.
Looking ahead to Q1 2025, speculators are keen to see whether NEAR’s recovery will extend. The recent losses in early 2025 could be attributed to the burst of the AI bubble, following the debut of OpenAI’s competitor and the emergence of low-cost Chinese AI chatbot DeepSeek.
NEAR’s price movements have shown a strong correlation with daily active addresses and DEX volume. During rallies, these metrics spiked, but they dropped during market drawdowns. The recent decline from $8 to $3 was accompanied by a steady decrease in daily active addresses and DEX volumes, indicating a muted sentiment in the market.
As of now, NEAR’s price is hovering around the $3 mark, a level that has historically acted as a strong support zone. In March, August, and November 2024, NEAR rebounded from this level, suggesting a potential recovery target of $4.7 or $5 in the near term. However, a break below the support could push the altcoin down to $2.
In conclusion, NEAR Protocol’s DeFi growth and price performance have been closely watched by market participants. As the network navigates through the uncertainties of the market, investors will be monitoring key metrics to gauge the potential for a sustained recovery in Q1 2025.