Market Overview for NEAR Protocol/Yen on 2025-10-07

• NEARJPY experienced a sharp decline in the early morning followed by a partial recovery in the afternoon.
• Strong bearish momentum seen in the first half of the day, as confirmed by RSI and MACD divergence.
• Bollinger Bands showed a significant contraction before the mid-day reversal, indicating a potential breakout.
• Volatility remained elevated with a 24-hour trading range of 13.4 JPY.
• Volume surged during the early morning selloff but declined during the recovery, hinting at mixed conviction.

The NEAR Protocol/Yen (NEARJPY) pair opened at ¥460.6 at 12:00 ET − 1 and touched a high of ¥463.6 before falling to a low of ¥440.0, closing at ¥440.9 by 12:00 ET. Total 24-hour volume amounted to 14,648.5 units, with a notional turnover of ¥6.4 million. The session was marked by a sharp selloff early in the Asian session followed by a moderate rebound in the late afternoon.

NEARJPY showed a classic bearish exhaustion pattern in the early hours of the session, with a long bearish candle and a wide range, followed by a failed rebound and a breakdown below key support levels. A strong bearish engulfing pattern appeared at the session high, suggesting a shift in sentiment. A doji formed near the 451.8 level, indicating indecision, but was quickly followed by another bearish candle confirming the downward trend. Key support levels emerged at ¥450.0 and ¥440.0, with the latter showing a strong rejection and bounce.

The 15-minute 20-period and 50-period moving averages crossed bearishly during the selloff, indicating short-term bearish momentum. The 20-period MA moved below the 50-period MA, reinforcing the downward bias. While the daily MA lines (50/100/200) are not visible from this dataset, the 15-minute chart suggests a continuation of bearish bias in the short term.

MACD showed bearish divergence in the early morning session, with the line dipping below the signal line as prices declined. The RSI confirmed this bearish momentum by entering oversold territory at the session low, suggesting potential for a near-term bounce. Bollinger Bands narrowed significantly in the late afternoon before the price rebound, indicating a potential breakout scenario. Prices closed near the lower band, which could either signal oversold conditions or a continuation of the bearish move if the band is broken decisively.

Backtest Hypothesis

The backtesting strategy outlined is designed to identify and act upon bearish exhaustion patterns, such as the one observed in the early morning session. The strategy would have entered a short position on confirmation of the bearish engulfing pattern and managed the trade with a stop loss near the high of the pattern. Given the subsequent breakdown and failed rebound, this would have been a successful trade in the short term. A trailing stop could have been initiated after a 5% rebound in the afternoon, locking in gains as the price showed signs of reversal. The strategy would also monitor RSI and MACD for confirmation of trend strength and momentum, ensuring exits are timely and minimizing exposure during periods of indecision. This approach aligns well with the observed price behavior, particularly in the morning selloff and afternoon bounce.