Assessing how NEAR flipped Litecoin with its recent rally

Assessing how NEAR flipped Litecoin with its recent rally

In an interesting turn of events, the NEAR protocol token has shot up by 15.06% over the last day to take Litecoin’s #19 position.

NEAR pushes Litecoin FAR away

The rise in its market cap was the result of two factors- smaller supply, and a strong rally. There is just one billion NEAR in total supply out of which 659 million NEAR are in circulating supply. Well, the 18.76% increase observed in the last 24 hours pushed NEAR’s market cap above $10 billion.

This 20.93% further adds to the 85.73% month-long rally of March.

NEAR price action | Source: TradingView – AMBCrypto

But despite the bullish price action, NEAR’s Rainbow bridge with Ethereum has been observing a severe decline in its usage and the assets bridged on it.

At the beginning of March, the most bridged assets – USDC, USDT, and NEAR were noting volumes over five million, 23 million, and 10.4k, respectively. However, at the time of writing, the same volumes collectively are under a million.

NEAR Rainbow Bridge total assets bridged | Source: Dune – AMBCrypto

On the other hand, NEAR’s price action is negatively correlated to the bridge usage, which went from $8.5 to $15.81 in the same duration. (ref. NEAR price action)

However, the decline observed in asset transfer rate and volume on the bridge has been a trend active for more than three months now. According to on-chain data, the input transactions that have been registered on the bridge since December have reduced by almost 83%.

Similarly, the output transactions have also noted a steady decline of 47% month on month. Thus, leaving the figure at just 45 transactions on 1 April.

NEAR Rainbow bridge input and output transactions | Source: Dune – AMBCrypto

Adding to that, the total amount of Ethereum deposited and withdrawn from the bridge in these three months has also noted fluctuations.

While the deposits did spike a couple of times towards the end of February and mid-March, the figures returned to their averages by March-end.

Ethereum deposits and withdrawals | Source: Dune – AMBCrypto

Although it seems like the drop-in bridge utilization only extends to the asset transfer since the overall addresses on the bridge, have been marking a rise throughout 2022.

From 14k addresses in January to 23.1k addresses, March has seen a growth of more than 65% growth.

Rainbow Bridge user stats  | Source: Dune – AMBCrypto

Nonetheless, in order to bring more users to the network, NEAR will have to make itself appear lucrative. Currently, there seems to be a lack of interest from the investors’ end.

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