Kaspa Plunges 75% From Yearly Highs as Momentum Exhaustion Grips Market
Market Structure Shifts Lower
- KAS has had a catastrophic 75.2% loss over the past year, and is priced at $0.038.
- exhilaration stats express capitulation methodology signs across a bunch of time series.
- the lastingly depressing price context has prompted the absence of bottom fishing endeavors to find any relief.
Kaspa has gone through a devastating downtrend over the past year, losing 75.2% from its highs to reach $0.038 – a price that wipes out almost all of 2023’s gains. The monthly performance isn’t any better, showing a 22.86% loss, with the downside accelerating into the weekly close. However, the KAS chart this week continues to suffer further despite the fact that the protocol is better-positioned than ever before, as its position includes EVM bridge integration and node counts hitting all-time highs. The question for traders to answer is: has KAS put in a floor following this relentless sell-off, or does the chart imply that there’s more hurt to come?
| Metric | Value |
|---|---|
| Asset | KASPA (KAS) |
| Current Price | $0.04 |
| Weekly Performance | -14.69% |
| Monthly Performance | -22.86% |
| RSI (Relative Strength Index) | 27.4 |
| ADX (Average Directional Index) | 37.1 |
| MACD (MACD Level) | 0.00 |
| CCI (Commodity Channel Index, 20-period) | -145.16 |
RSI Hits 27.39 – Deepest Oversold Territory Since Project Launch
With the indicators at very low levels on the stock, the concept of waiting for a better entry point before buying in applies here.
A different indicator, the momentum index, has also been registering historic readings at three-negative standard deviations from the 39-week moving average, suggesting a sharper-than-normal pullback from the trendline.
What is interesting to note is the performance of the RSI indicator with the latest series of infra announcements, news of the EVM bridge integration and the Kasia app along with it. It seems that the indicator has refused to recover significantly from oversold regions, which means the uptrend was not strong enough to overcome any of the positive seller-exhaustion signals. Hence, it can be said that this reading is a high probability setup for swing trades to the long side, and any bounce hence is likely to face severe resistance from the overbought longs.
ADX at 37.10 Confirms Mature Downtrend Nearing Exhaustion
The signal is calculated from averaging the +DMI and -DMI over all periods used. The -DMI is the metric for the bearish segment of the price movement, which also reflects the current downtrend better. Buyers have incredibly long memories when it comes to losing money and it will take significant price increases to stimulate sales by those underwater. The logic in these emotional sentiments is clear enough.
Historical instances show that ADX readings above 37 have preceded major trend shifts three times before. Two resulted in 40%+ relief rallies, while one headed 20% lower, again. With the node growth surging to record levels and throughput steadily increasing, the gains haven’t materialized as of yet. However, through the lens of technicals, the setup would indicate that range traders might soon have their turn as directional momentum dissipates.
Every Major EMA Becomes Resistance as Price Trades 80% Below 200-Day
Looking at the Long vs. Short Open Interest, the available data does at least suggest the bears may have run out of gas whilst the bulls consolidated their positions, with the former down nearly 7% and the latter up almost 10% over the week. However, this is not exclusive and the profit DL you get is very much dependent on the exchange being used.
The most important resistance level to conquer is represented by the 50-day EMA at $0.054. This level consistently prevented recovery efforts since October, despite favorable ecosystem updates. Going into 2024, this former support zone turns into a strong resistance level that bulls need to overcome to change the trend. The 50-day EMA is 40% above the current price, underlining the substantial amount of effort that has to be invested in any recovery.
Support Evaporates Below $0.040 While Resistance Stacks From $0.054 to $0.095
Sellers have built strong resistance above the current price across psychological areas and former support levels. The nearest resistance holds between $0.054 (50-day EMA) and $0.060 (January’s monthly high), with the monthly pivot at $0.074 and the 100-day EMA at $0.064 serving as the next barrier. A breach above this level should facilitate a retest of the YTD high cluster lined between $0.090 and $0.080.
The support structure seems very weak once that gives way $0.040 – a level prevailing throughout 2023’s bear market. The monthly S1 pivot at $0.0260 appears as the subsequent noteworthy floor, yet that would signify another 31% drop from prevailing prices. Weekly support estimations indicate $0.0250 as the ultimate protection afore moving into undiscovered lands under 2023’s few extremes.
The market structure shows full bearish dominance until buyers can recover and flip $0.040 as support. Until that happens, the default direction is down despite the oversold conditions and positive progress in the ecosystem. The lack of correlation between positive announcements and price action indicates that either KAS is being undervalued by the market, or large seed investors are still flooding the market with sell orders that are overwhelming natural buyers.
Bulls Need Decisive Reclaim of $0.040 to Halt Year-Long Bleeding
In order for any bullish reversal to be taken seriously, KAS must reestablish a higher low above $0.036 and then solidly retake the $0.040 psychological level on daily close. This would set a bear trap and likely force short sellers to cover toward the $0.054 level, which could be reached earlier if supported by ongoing ecosystem adoption statistics from the Kasia app and bridge.
If bulls successfully defend the $0.028 weekly support and pivot level, this would likely form a higher low on the weekly timeframe which is a key ingredient for trend reversal. Encouragingly, volume has been decreasing during this consolidation which often indicates the formation of a new trend. A move above $0.035 could see a quick rally to $0.040 – where a significant amount of volume traded and price accelerated to the downside.
Due to the highly speculative nature of blockchain projects and cryptocurrencies, Kambria advises extreme caution and stresses that this is not financial advice. Always do your research and consider your risk tolerance and investment goals.
