- NEAR plunged below $5 after a $20 million long liquidation event.
- Open Interest dropped sharply as traders reduced risk and exposure.
- Dip buyers accumulated heavily, supporting hopes for a recovery above $5.
NEAR Protocol has entered a dangerous stretch after losing a key support zone. The drop below $5 caught many traders off guard and triggered heavy liquidations across derivatives markets. While fear spread among leveraged investors, another group saw opportunity and started buying the dip. Now, the market faces a crucial question: can buyers regain control, or will selling pressure push NEAR toward even lower levels in the days ahead?
A $20 Million Long Squeeze Shakes Market Confidence
NEAR fell sharply as the broader crypto market pulled back. The token slipped below the important $5 support level and touched a low near $4.60. At the time of writing, NEAR traded around $4.70, marking a daily decline of almost 8%. Trading activity increased during the selloff. Spot volume climbed 19% to $1.62 billion. Rising volume during a price decline often signals stronger selling pressure.
Traders appeared eager to reduce risk as market sentiment weakened. The biggest story came from the derivatives market. According to CoinGlass data, more than $20 million in long positions were liquidated. Such events occur when leveraged traders are forced out after prices move against their bets. Large liquidations tend to create a chain reaction. Falling prices trigger forced selling.
That pressure pushes prices even lower. Fear then spreads among market participants and encourages additional exits. Several technical indicators reflected this shift in sentiment. Open Interest dropped 12.3% to $1.4 billion. At the same time, derivatives volume increased 12% to nearly $3 billion.
Dip Buyers Step In as Bulls Try to Defend the Trend
Despite weakness in derivatives markets, spot investors showed a different attitude. Many traders viewed the decline as a buying opportunity rather than a reason to panic. Spot market data supports that view. NEAR recorded a Spot Netflow of negative $28 million on September 28. That marked the lowest reading since June. Negative Netflow means investors moved more tokens away from exchanges than onto them.
Such behavior often signals accumulation rather than preparation to sell. Sustained outflows can reduce available supply and help stabilize prices. Technical indicators also present a mixed picture. The Relative Strength Index recently formed a bearish crossover and fell to 68. That move suggests buying momentum has weakened. However, the indicator remains inside bullish territory.
Sellers have gained ground, but buyers still retain meaningful influence over the broader trend. Current conditions suggest further volatility remains possible. If derivatives traders continue reducing exposure, NEAR could slide toward the $4.40 support area. On the other hand, strong spot demand may absorb selling pressure. Continued accumulation could help buyers regain momentum and push the token back above $5.
