NEAR's $1.92B Futures Record Raises Leverage Concerns

Open interest on NEAR-related futures contracts hit a record $1.92 billion on October 12, while the token benefited from a rotation into cryptos associated with artificial intelligence. This peak reflects strong speculative activity, but not the arrival of $1.92 billion in fresh capital.

NEAR’s open interest quadruples in two months

Open interest on NEAR derivative contracts fluctuated between $300 and $450 million in July and August. It started to increase rapidly in mid-September before surpassing one billion dollars and then reaching $1.92 billion on October 12.

The price followed a similar trajectory. NEAR was worth about $1.60 in August, compared to nearly $6 at the time of the record. This represents an increase of more than 260% in a few weeks.

Open interest measures the notional value of contracts that have not yet been closed. It does not correspond to amounts actually deposited as margin nor to direct purchases of the token on the spot market.

Its increase can come from several factors: creation of new positions, increase in NEAR’s price, or increased use of leverage. In September, open interest expressed in dollars had thus increased much faster than the number of tokens represented by the contracts.

This record confirms the exceptional attention from traders, but does not reveal their direction. Each contract pits a long position against a short position. High open interest can accompany either a rise or a future liquidation cascade.

Wintermute sees a crypto capital rotation towards AI

The record occurred during a difficult week for the crypto market. Bitcoin fell by 3.2% and Ethereum by 7%, while only 11 of the 66 main altcoins ended in positive territory. Their median decline reached 3.7%.

US bitcoin ETFs recorded about $679 million in net outflows over the week. Ethereum funds lost $542 million, while $1.19 billion in crypto positions were liquidated within 24 hours around the weekly low.

In this context, Wintermute describes NEAR as the main beneficiary of a rotation towards projects related to artificial intelligence. The market maker notes that capital left some large caps and the DeFi sector to focus on this new narrative.

Its October 12 report summarizes :

Capital that exited liquid DeFi and large caps moved towards AI-related assets, with NEAR as the main winner.

Wintermute mentions two possible explanations for this outperformance: the arrival of post-quantum signatures and a short squeeze. However, the group specifies it was unable to confirm that these two elements were indeed the causes of the movement.

NEAR builds its positioning around AI agents

NEAR does not only benefit from a label added by traders. The project has been developing for several months an infrastructure dedicated to autonomous agents, confidential inference, and interactions between different blockchains.

NEAR AI has notably integrated OpenRouter into its confidential inference platform. This setup aims to allow the use of AI models without exposing certain sensitive data to providers executing the calculations.

The project is also working on tools enabling AI agents to manage accounts and perform operations across multiple networks. This direction places NEAR at the intersection of two trends sought by investors: automation through AI and abstraction of exchanges between blockchains.

The network has moreover introduced support for post-quantum signatures. This development comes at a time when several researchers question the future ability of artificial intelligence and quantum computers to weaken current cryptographic systems.

These developments provide a technological basis for the narrative. However, they do not yet demonstrate that NEAR dominates the AI application market, whose uses and revenues remain limited.

The drop in open interest signals still fragile leverage

After reaching $5.88, NEAR quickly corrected. The token now trades around $5, while open interest has dropped back to $1.56 billion.

This decline of nearly $360 million since the record indicates that positions have been closed voluntarily or liquidated. It confirms that the peak on October 12 partly relied on significant leverage.

The daily volume of futures contracts still reaches about $2.4 billion, versus nearly $440 million on the spot market. This difference shows that derivatives play a central role in the current price formation.

The zone between $4.60 and $4.30 now constitutes the main technical support. A return above $5.50 would allow the token to target $6 again.

NEAR thus benefits from a credible positioning in AI, but its record remains primarily that of derivatives contracts. The network’s ability to turn this attention into users, activity, and revenue will determine if the movement can surpass speculation.