NEAR’s security update has had this effect on investor confidence
Solana was in the news recently after it addressed this week’s hack by underscoring the need to improve wallet address security. NEAR protocol promptly took note and has now taken action to improve security for all NEAR wallet users.
In fact, NEAR recently revealed that it conducted a security review of wallets earlier this week. This includes searching for potential vulnerabilities that might affect users. The security update in question confirmed a vulnerability involving wallets whose SMS or email recovery data was handled by a third party.
On 6/6/2022 a bug was reported in the wallet. There was a potential vulnerability in the security of wallets that used email or SMS recovery as data travelled to the third party service. The bug was patched that same day and no accounts were compromised.
— NEAR Protocol | NEARCON.org | Lisbon | Sept 11-14 (@NEARProtocol) August 4, 2022
The protocol is keen on moving from the SMS and email recovery method in a bid to boost wallet security. New addresses will no longer use this method and NEAR has encouraged existing users to change their security settings.
NEAR protocol’s decision to focus on security and protecting user addresses may have provided a boost to investor confidence. In fact, NEAR rallied by 17.5% on 5 August, within hours of the security update being released.
NEAR’s short-term price action has been confined by an ascending resistance line. On 5 August, the price surge yielded a resistance line retest and even managed to cross above the same, before facing some friction. The price has already retraced slightly since.
NEAR’s current retracement is also not surprising considering that the rally briefly pushed the price into the overbought zone.
A big whale splash
The cryptocurrency’s strong bullish uptick on Friday was backed by a strong increase in its market cap. The latter grew by more than $500 million during the same trading session.
When such large amounts do not move around quickly, this would explain why the latest pullback has not been as pronounced.
The market cap, at press time, was holding strong above $3.8 billion. While large inflows supported the resistance breakout, they might also support higher price levels. However, the volume metric might suggest otherwise.
Why a stronger upside might be around the corner
Friday’s price spike and large market cap inflows were backed by the second-largest volume spike in the last four weeks. The last time the volume registered such a spike was on 19 and 20 July.
A slight retracement ensued, followed by another bullish move which pushed the price higher. NEAR’s weighted sentiment metric might also be in favor of another bullish outcome.
Interestingly, the weighted sentiment’s press time reading of -2.29 was its lowest level in the last four months. This suggests that the price might be due for more upside. Only time will tell if that is indeed the case.