NEAR Protocol's Explosive Surge Raises Questions About Timing and Safety

NEAR Protocol has seen a remarkable 156% increase in value over the past three months, making it the standout performer among major cryptocurrencies. This growth is largely attributed to the launch of its private trading feature on September 17, which allows users to trade perpetual futures without connecting their wallets to their trading positions.

The launch led to a 27% price jump in a single day to around $4.43, and trading volume more than doubled. Additionally, a small token airdrop was included, distributing 333,333 NEAR tokens worth about $1.7 million, after deposits in the private trading system exceeded $70 million. However, given NEAR's market capitalization of about $6.7 billion, this airdrop is too small to significantly influence selling pressure.

NEAR has already started to pull back, dropping about 6% since September 30, as some investors took profits following the dramatic 143% increase within a month. The token remains roughly 75% below its all-time high of $20.44, reached in January 2022. With NEAR's market capitalization at about one-tenth of Solana's, a wave of selling could lead to even larger price declines.

Unlike NEAR, Solana's ascent has been more measured, with a 48% increase over the last 90 days. Solana's consistent investor backing, including U.S. Solana ETFs seeing inflows for over 12 consecutive weeks, contributes to its more gradual rise. However, inflows can fluctuate, and Solana ETF inflows fell 96% early in September before picking up again.