Near protocol price prediction as the sell-off intensifies

By: Crispus Nyaga
Crispus Nyaga
Crispus is an active trader, where he is followed and copied at Capital.com. He lives in Nairobi with his… read more.
on Dec 6, 2021
  • The Near protocol price has been in a major sell-off lately.
  • The price has lost about 50% of its value in the past few months.
  • We explain why the coin could keep falling in the near term.

The Near protocol (NEAR/USD) price has sold off lately. It has declined in the past four straight days and moved to the lowest level since September 28. Its price has declined by more than 50% from its highest level this year. This drop has brought its total market capitalization to more than $4.16 billion, making it the 43rd biggest cryptocurrency project.

What is the Near protocol?

Near protocol, popularly known as Near, is a blockchain project that is creating a better platform than Ethereum. It is a proof-of-stake project that is significantly faster and more adaptive than Ethereum and some of its peers. It recently raised more than $21 million from Andreessen Horowitz.

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Near is achieving this through a technology that was pioneered by Zilliqa, a well-known project. This technology is known as sharding. In November, the developers launched Nightshade sharding, which will lead to faster speeds. It does this by dividing blocks into smaller pieces known as shards. 

The initial step of the process is known as simple nightshade, which will help the network shard the state but not the processing. This means that the network will still need validators to verify transactions.

In the past few months, the number of developers building on the Near protocol has risen substantially. Some of the best-known projects built on Near are Portis, Trust Wallet, Magic Wallet, and Ontology.

Still, like most Ethereum-killers, the Near protocol faces several significant challenges ahead. The first biggest challenge is Ethereum itself. 

Near faces challenges

While Ethereum has its challenges, its pole position has enabled it to have a dominant position in the industry. For example, it has been used to build most of the DeFi projects in existence today. It has also been used to build many platforms like OpenSea and Decentraland.

At the same time, Ethereum developers are working to optimize the platform using the ETH 2.0 upgrades. These upgrades will make it a better platform that is significantly quicker.

The other challenge is that the smart contract industry is relatively competitive. Some of the top alternatives to Ethereum are Solana, Cardano, Binance Smart Chain, and Polkadot.

Near protocol price prediction

Near price

The four-hour chart shows that the Near price has been in a major bearish trend in the past few weeks. The price has formed a bearish channel that is shown in black. It is along the lower side of this channel. It also moved below the 25-day and 50-day moving averages. Therefore, there is a likelihood that the coin will likely keep falling as bears target the key support at about $6. 

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