Why is Near protocol price going up?

This rapid ascent was largely driven by derivatives activity, specifically a large-scale short squeeze. Bearish traders were caught off guard as NEAR broke through a key resistance level near $1.72. Coinglass data indicates that nearly $5.8 million out of $6.1 million in liquidated positions within 24 hours were from shorts. A substantial $2.4 million in short positions were liquidated in just four hours after the token surpassed resistance connecting its March and mid-May highs. This cascade of forced buybacks created intense demand pressure and quickly depleted available sell-side liquidity.

Compounding this technical catalyst was a broader market rotation towards artificial intelligence-linked crypto assets. This shift followed NVIDIA's first-quarter FY2027 earnings report on May 20. The chipmaker reported staggering quarterly revenue of $81.6 billion and profits of $58.3 billion, an 85% year-over-year revenue increase. NVIDIA CEO Jensen Huang's statement, "Agentic AI has arrived," during the earnings call, highlighted the growing competition in AI development and its focus on compute efficiency and token generation.

In the wake of NVIDIA's report, capital aggressively flowed into AI-related crypto projects. NEAR Protocol emerged as a significant beneficiary due to its established position in decentralised AI infrastructure. Further bolstering market confidence, the protocol expanded its enterprise-focused AI tooling. A key development was the introduction of automatic personally identifiable information (PII) anonymisation for AI prompts. This feature allows developers to remove sensitive data like passwords and API keys before requests are sent to external large language models, addressing critical privacy and data security concerns.

Why it matters for Australian investors

For Australian investors, the recent performance of NEAR Protocol and the broader AI crypto narrative present both opportunities and considerations. The surge highlights the potential for significant returns in niche sectors driven by technological advancements. As the Australian crypto market matures, investors often look to global trends amplified by specific project developments. Platforms like CoinSpot, Independent Reserve, Swyftx, and BTC Markets, popular among Australian users, would likely have offered access to NEAR, enabling local participation in its rally.

The growing focus on decentralised AI infrastructure by projects like NEAR is particularly relevant. Australian businesses are increasingly exploring AI integration, and the underlying privacy and data security features offered by NEAR's PII anonymisation could resonate with local industry standards and regulatory expectations. The move towards `Agentic Web` and `Intent-based` transactions also signifies a shift towards more sophisticated decentralised applications.

Any substantial gains derived from trading assets like NEAR are subject to capital gains tax in Australia, as outlined by the ATO's guidance on cryptocurrencies. Australian investors need to be mindful of their tax obligations and maintain accurate records of their crypto transactions. While the short squeeze phenomenon can drive rapid price increases, it also underscores the volatility inherent in the crypto market, a key factor Australian investors should assess in their risk management strategies.

Furthermore, the increasing sophistication of decentralised applications and cross-chain integrations, as seen with NEAR Intents, points to a future where blockchain technology is seamlessly integrated into various digital experiences. For Australian investors, understanding these foundational shifts is crucial for identifying long-term value propositions beyond speculative price movements. AUSTRAC's role in ensuring clean financial transactions remains pertinent as the ecosystem evolves.

Impact on the AUD market

While NEAR's price surge is primarily driven by global crypto market dynamics, it inevitably has ripple effects on the Australian dollar (AUD) denominated crypto market. Increased trading activity on Australian exchanges for high-performing assets can lead to higher liquidity in AUD trading pairs for various cryptocurrencies. This can benefit Australian traders by potentially offering tighter spreads and more efficient execution.

When global crypto assets experience significant rallies, Australian investors typically convert AUD into stablecoins or other major cryptocurrencies to participate. This can create demand for AUD-to-crypto gateways on local exchanges. Conversely, if investors choose to realise profits, there's a potential for capital outflows from the crypto ecosystem back into AUD, impacting local exchange volumes and potentially influencing the AUD/crypto exchange rates.

The narrative around AI in crypto, of which NEAR is a prominent example, could also attract new Australian capital into the digital asset space. If Australian institutional or retail investors perceive AI-linked crypto as a growth sector, it could drive fresh AUD liquidity into the market. ASIC, responsible for consumer protection, continually monitors such developments, emphasising the importance of informed decision-making.

The underlying technology powering NEAR's advancements, particularly its enterprise AI tooling with privacy features, could also find future applications or partnerships within Australian tech firms. While speculative, any such collaboration could elevate the profile of blockchain technology within Australia, potentially leading to increased local investment and development in the decentralised space.

What to watch next

Going forward, Australian investors should closely monitor several key areas impacting NEAR Protocol and the broader AI crypto sector. The immediate aftermath of the short squeeze will be crucial; observing whether the momentum can be sustained or if a period of price consolidation follows is important. Continued trading volumes and exchange liquidity can provide early indicators of market sentiment.

Keep an eye on further developments within NEAR Protocol's `Agentic Web` vision and its `Intent-based` architecture. Real-world adoption and partnerships, especially those demonstrating the utility of its PII anonymisation feature for enterprise AI, will be vital. Any announcements concerning new integrations or significant upgrades to its infrastructure could provide fresh catalysts for price action.

The performance of NVIDIA and the broader AI technology sector will continue to serve as a significant bellwether for AI-linked cryptocurrencies. Strong earnings or breakthroughs from major AI players could reignite interest and capital flows into projects like NEAR. Conversely, any slowdown in the AI industry could temper enthusiasm.

Finally, broader market sentiment and macroeconomic factors remain critical. Interest rate decisions, inflation data, and regulatory announcements, particularly concerning AI or cryptocurrency in major jurisdictions, could influence investor behaviour. For Australian investors, staying informed on these global trends, alongside local regulatory developments from bodies like ASIC and AUSTRAC, will be crucial for navigating the evolving crypto landscape.