The artificial intelligence-linked token NEAR Protocol experienced a dramatic reversal this week, surrendering a significant portion of its recent explosive rally as profit-taking coincided with renewed weakness across cryptocurrency markets. The pullback highlights the extreme volatility that can follow sentiment-driven moves, especially when fueled by high-profile endorsements.
Earlier in the week, NEAR had surged approximately 50% over a seven-day period, reaching a six-month high after BitMEX co-founder Arthur Hayes named it among his "holy trinity" of altcoins alongside Hyperliquid and Zcash. The endorsement triggered over $9.85 million in short liquidations and drew institutional inflows into Bitwise's NEAR exchange-traded product (ETP). On May 22, the CoinDesk 20 index recorded NEAR surging 19.4% in a single session, leading an AI token rally that also propelled FET and RENDER higher even as Bitcoin stalled around $77,000.
However, the rally proved unsustainable. By May 27, NEAR had dropped over 7% to trade near $2.73, according to data from TradersUnion. The decline came as Bitcoin fell below $76,000, causing broad altcoin weakness and erasing appetite for risk. Experts had warned that "such sentiment-driven rallies often invite volatility and profit-taking," and the analysis proved prescient.
Technically, NEAR's 200-day moving average has been declining since late April, signaling that the longer-term downtrend remains structurally intact despite the vertical bounce. Analysts pointed out that the short liquidations during the rally phase may have artificially amplified the upward move, making the subsequent correction steeper once that fuel was exhausted. The nearest support zone is at $2.50; a sustained break below could open the door to a retest of the $2.00 floor from early May.
The token's market capitalization stood at approximately $3.54 billion at the time of writing, with a circulating supply of 1.30 billion tokens. While NEAR has integrated post-quantum cryptography and completed Resharding V3 earlier in 2025, these technical upgrades have not yet generated sustained price support. Traders now watch whether Hayes's endorsement will translate into durable institutional demand via products like the Bitwise NEAR ETP, or if the rally fades as a one-time sentiment catalyst.
