The NEAR price has defied gravity. The fast-growing token surged to an all-time high of $19.20 even as other altcoins crawled back. NEAR Protocol’s market capitalization has jumped to over $11 billion, making it the 20th biggest cryptocurrency in the world.
Strong growth
NEAR has had a strong comeback in the past few months. After lagging other cryptocurrencies like Solana and Cardano in 2021, the coin staged a comeback in the final two months of the year. Recently, it has become one of the best performing altcoins of the year.
The strong performance of the coin can be traced to November when the developers launched the Nightshade sharding transition. Sharding is a technology used by other platforms like Zilliqa and Elrond to accelerate the speed of transactions.
In conventional blockchain technology, blocks are handled as a whole, a process that often takes time. With sharding, blocks are divided into smaller blocks known as shards. By so doing, the speed of transactions is increased.
In November, NEAR launched its first part of the sharding process known as phase 0 or simple nightshade. In it, the developers managed to shard the state but not the processing. In it, the state is currently split into four shards, which improves the throughput.
Therefore, the NEAR price is rising as investors wait for the Phase 1 sharding process to complete in this quarter. This phase will introduce chunky-only producers who will validate only one shard. After this phase, the developers will move to Phase 2 that will eliminate the need for validators.
The final phase will be known as dynamic resharding, which will happen in the third quarter of the year. As such, this will be the busiest year for the NEAR blockchain platform.
Still, Near faces the challenge of mass adoption. For one, it only has two DeFi apps in its ecosystem that have a total value locked (TVL) of less than $150 million. It also faces strong competition from the likes of Binance Smart Chain, Ethereum, and Terra. Finally, it faces the challenge of sharding technology. In the past, platforms built on sharding like Zilliqa and Elrond have lagged.
NEAR price prediction
The daily chart shows that the NEAR price has gone parabolic as it has jumped by over 1,000% from its lowest level in August last year. The coin remains above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has been in a bullish trend. It has also moved above key resistance levels such as $18 and $15.
Therefore, there is a possibility that the NEAR Protocol price will continue rising as bulls attempt to move above the key resistance at $25.
