Near experienced a downward trend last week, with the token price briefly hitting a seven-day low early on July 24. The consistent decline in token value led to increased long liquidations in the futures market as investors caught on the wrong side of the market were forced to close their positions.
What is Happening with Near?
At the time of writing, NEAR is trading at $5.94. The token’s value dropped nearly 5% over the past week. This decline caused many futures investors who believed prices would rise to witness liquidations. Liquidation in the futures market occurs when an asset moves against the investor’s position. When this happens, the investor’s position is forcibly closed due to insufficient funds to maintain it.
Liquidations occur when investors with long positions are forced to sell the asset at a lower price to cover their losses as the price falls. This typically happens when the asset’s price drops below a certain level, forcing investors with open positions betting on a price increase to exit the market. According to Coinglass data, NEAR long liquidity reached approximately $2.31 million over the past seven days.
Interestingly, despite this, NEAR’s futures market participants continued to demand long positions. This is evidenced by the funding rate on cryptocurrency exchanges, which was 0.0047% at the time of writing.
NEAR Chart Analysis
The demand for long positions continued despite the ongoing downward trend in NEAR. For context, the weighted sentiment of the token has been predominantly negative since June 24 and was recorded at -0.26 at the time of writing.
A weighted sentiment data of an asset tracks the overall mood of the market regarding it. When an asset’s weighted sentiment value is below zero, most social media discussions are driven by negative emotions like fear, uncertainty, and doubt. If the sentiment shifts from negative to positive, NEAR’s price could rise to its monthly high of $6.49, increasing demand for the altcoin. However, if the ongoing decline continues, the token’s price could drop to $5.17.
