NEAR Protocol [NEAR] has managed a short-term price recovery following a significant drop in its price action caused by a recent security scare that impacted investor confidence.
The incident involved NEAR Intent, which halted its services after a vulnerability resulted in investors losing $3.8 million worth of funds. The negative news generated immediate selling pressure for the token. However, investor sentiment began to recover after NEAR Protocol clarified in a post that the security issue was separate from the protocol itself.
Retail Traders Drive the Rebound
The short-term recovery has been fueled largely by retail market activity, with retail orders continuing to flow into the network. On the hourly price chart, NEAR recorded seven consecutive hours of gains and reclaimed both the 20-day and 50-day Exponential Moving Averages (EMAs) in the process, signaling improved short-term sentiment.
Long-Term Sentiment Remains Cautious
Despite the recent bounce, long-term indicators for NEAR continue to reflect caution. The network's open interest and trading volume have not returned to levels seen before the exploit announcement. Over a 24-hour period, trading volume declined by 10% to $1.52 billion, while Open Interest (OI) shrank by 9% to $265 million. These metrics indicate that institutional traders and leveraged participants remain hesitant.
Market observers note that without a meaningful recovery in trading volume and open interest, the current rally may struggle to develop into a sustained uptrend, requiring continued retail demand and broader market participation to build further strength.
