NEAR Protocol Sees 4% Drop, Then Rebounds Amid Market Volatility Amid Support at $2.14-$2.16 and Potential Inflation Rate Cut to 2.5%

NEAR Protocol's price fluctuated by 4% over the past 24 hours before recovering, with support established at $2.14-$2.16. The cryptocurrency market turned green, with the global market cap increasing by 2.2% to $3.37 trillion. A proposal to cut NEAR's inflation rate from 5% to 2.5% aims to enhance long-term blockchain sustainability and potentially boost token value.

The cryptocurrency market experienced a positive shift over the past 24 hours, with the global market cap increasing by 2.2% to $3.37 trillion. NEAR Protocol, a decentralized blockchain platform, exhibited resilience despite significant price volatility, establishing support at $2.14-$2.16 [1].

A key development for NEAR's economic model is a proposal to cut the protocol's inflation rate from 5% to 2.5%. This strategic move aims to enhance long-term blockchain sustainability, potentially boost token value, and better align ecosystem incentives [2]. The proposal is currently subject to validator voting through the end of July 2025, reflecting NEAR's commitment to decentralized governance [1].

Technical analysis of NEAR-USD showed significant volatility during the 24-hour period from 24 June 15:00 to 25 June 14:00, with an overall range of $0.088 (4.0%). A sharp decline to $2.141 at 09:00 before recovering formed a key support zone around $2.14-$2.16. High-volume buying emerged at the 08:00-09:00 candles, with volumes of 2.99M and 2.53M respectively, well above the 24-hour average. Resistance established near $2.22-$2.23 throughout the trading session [1].

The 13:00 candle showed renewed bullish momentum with above-average volume (2.80M), suggesting potential continuation of the recovery trend. During the last 60 minutes from 25 June 13:06 to 14:05, NEAR-USD exhibited a bullish surge followed by a sharp correction. The price rallied from $2.17 to peak at $2.19 around 13:48-13:49, gaining approximately 1.2% [1].

The proposed reduction in the inflation rate is expected to mitigate token dilution, create a more stable economic environment, and enhance the token's appeal to investors and users. Key figures like Illia Polosukhin, co-founder of NEAR Protocol, have endorsed the proposal, highlighting the need to reduce reliance on staking as the main source of yield and positioning NEAR as a potential store of value in emerging AI-focused environments [2].

The reduction in staking rewards from 9% to 4.5% may impact validators' incomes but could benefit NEAR-based DeFi competitiveness. Reduced staking yields could alter validator dynamics, affecting flows and operations. However, the proposal may improve investor sentiment and ecosystem dynamics, potentially aligning incentives with network usage and sustainability [2].

If approved, the reduction in inflation rate will mark a significant milestone in the platform's development and its commitment to creating a sustainable and valuable token economy. This move is expected to have a positive impact on investor interest and the competitiveness of its decentralized finance products, potentially boosting the overall ecosystem [2].

References:
[1] https://finance.yahoo.com/news/near-protocol-plunges-4-staging-151206374.html
[2] https://www.ainvest.com/news/protocol-proposes-halving-inflation-rate-2-5-long-term-sustainability-2506/