Has the Altcoin That Rose 81% in One Week Run Out of Steam? Santiment Examined the Data
Examining NEAR’s 81% rise between September 13–20, Santiment said it has not yet seen a strong exhaustion signal in the data, but noted that the move is no longer in its early stages.
Crypto analytics platform Santiment linked NEAR’s rise to the privacy-focused interest that has recently concentrated around Zcash. According to the platform’s assessment, NEAR is emerging as a new candidate in this theme. The rise coincided with the launch of a privacy-focused perpetual futures product around September 17.
However, the noteworthy aspect of the analysis is not only the price increase. During the same week, NEAR’s dollar-denominated open interest rose by 119%, while open interest calculated in terms of the amount of NEAR increased by 21%.
Why could the 119% increase be misleading?
Open interest refers to futures contracts that have not yet been closed. The dollar value of these positions also grows when the asset’s price rises. Therefore, the 119% increase on a dollar basis does not mean that new money entered the market at the same rate or that the number of traders increased by that much.
In Santiment’s chart, the price, dollar-denominated open interest, and NEAR-denominated open interest are compared by setting them all equal to 100 at the September 13 close. The NEAR-denominated series is calculated by dividing dollar-denominated open interest by the price. This shows that during the week in which the price rose by 81%, the increase in position size in terms of the number of tokens was more limited.
Does funding data show that the rally is losing steam?
The funding rate, which determines periodic payments between position holders in perpetual futures, reached 1.6 times the median of the past two months on September 20. Santiment noted that this level was also seen on two ordinary days during the same period under review, emphasizing that the figure alone does not represent an unusual extreme.
The platform’s conclusion is that price, open interest, and funding indicators have not yet displayed a strong enough divergence to say that the rally is running out of steam. However, Santiment emphasized that the early stage of the rise is behind us. This assessment does not mean that the rise will definitely continue; it shows how the data should be interpreted following the 81% move.