NEAR Protocol gains 11.5% as funding rate cools — one warning for traders

NEAR Protocol [NEAR] has rallied 11.5% in the past 24 hours at press time and was drawing speculative interest too, because nothing says "healthy market" like everyone piling into the same direction at once.

The gains inspired derivatives traders to go long on NEAR contracts, as evidenced by the 11.6% increase in Open Interest (OI) in a day. Yet, while the OI climbed higher, the funding rate has fallen back toward neutral levels, according to Coinalyze data — a classic case of "bought the dip, skipped the memo."

The rising Funding Rate on the 31st of May and the early hours of the 1st of June reflected aggressive longs. In the 24 hours since then, the funding rate has fallen close to zero, meaning that the market has digested the spike in short covering that helped drive the initial rally. Apparently, even degens need to nap.

As things stand, in the short term, the dip in the funding rate suggests long positions do not need to pay a heavy premium to stay long, a sign of a healthy rally. Cautious optimism, but optimism nonetheless.

In March 2025, a higher low was breached (white), which showed a NEAR bearish swing structure shift on the weekly timeframe. In December 2025, another swing low was broken (red) at $1.79, signaling a bearish higher timeframe trend continuation. The swing high on this timeframe sits at $3.34. The Fibonacci retracement levels (orange) highlighted the $2.38-$2.80 area as a golden pocket that could see a bearish reaction. This has not come to pass yet, but the chances remain good. Charts are patient beasts.

The H4 swing structure remained bullish. Moreover, in the past week, the AI token witnessed a positive reaction from the H4 swing move's 78.6% retracement level at $2.21. Despite the higher timeframe bearish trend, traders have reason to stay bullish — mixed signals, as is tradition.

As things stand, a rally to $3.20 or beyond is possible. A break of the $2.01 level is needed to flip the swing structure bearishly and cue traders to favor selling rather than buying. Until the H4 swing structure turns bearish, swing traders can maintain a bullish bias. They should also remember the threat from the $2.8-$3.0 supply zone, because the market loves a good ambush.