Is Now the Right Time to Buy Kaspa (KAS) Amid a Key $0.08 Support Battle?

The cryptocurrency market’s attention is fixated on Kaspa (KAS) as it battles to hold the critical $0.08 support level. With a mix of technical indicators, on-chain activity, and positioning imbalances in play, the question for traders is whether this price level represents a strategic entry point or a warning sign of further downside.

Technical Analysis: A Crucial Crossroads

KAS has been consolidating within a symmetrical triangle pattern on the daily chart, with the $0.080–$0.082 range acting as a pivotal support zone [1]. The Stochastic RSI indicator is in oversold territory (~20), hinting at potential short-term buying pressure [1]. However, the price remains below the 200-day moving average (200DMA), a bearish signal that underscores the need for caution [2]. A breakout above $0.092 could validate a bullish reversal, targeting $0.11 and beyond, while a breakdown below $0.07520 would likely trigger a retest of $0.060 [2].

The $0.08 level has been tested multiple times without panic selling, suggesting long-term holders (LTHs) remain confident in the project’s fundamentals [1]. This resilience is further supported by growing network activity, including 135,000 daily active addresses and 427,000 transactions—a sign of real-world adoption [1].

Liquidation Events and Positioning Imbalances

KAS recently experienced its largest long liquidation event, wiping out $3.4 million in leveraged long positions [1]. This imbalance—crowded longs and untouched shorts—has created a volatile environment where a sharp move in either direction could accelerate trends. Open interest has surged as the price consolidates above $0.07–$0.08, indicating heightened speculative activity [2].

A critical risk looms on February 5, 2025, when 0.67% of KAS’s circulating supply (~$17.29 million) unlocks, potentially pressuring the price if sellers flood the market [3]. For now, bulls are relying on the $0.08 level to hold, as a breakdown could invalidate the triangle pattern and reignite the downtrend.

On-Chain Metrics and Investor Sentiment

On-chain data reveals a mixed picture. The second-largest KAS wallet has been accumulating tokens, increasing its balance from 720 million to 750 million KAS since May 2025—a move from exchanges like Gate.io and Bybit to a private wallet [1]. This suggests reduced short-term sell pressure and long-term conviction. Liquidity clusters have also formed around $0.085–$0.09, but the thinning liquidity below $0.08 raises the risk of a sharper decline if support fails [1].

Investor behavior further complicates the outlook. Short-term holders have rotated positions after KAS’s rejection at $0.12, while long-term holders (LTHs) have reached a record 13.5% of supply in wallets inactive for over two years [2]. This “diamond hands” dynamic indicates sustained confidence, but it also means the market is vulnerable to a lack of immediate liquidity if panic sets in.

Bearish-Bullish Battle: Catalysts and Risks

The Fear and Greed Index for KAS trends toward fear, with volatility and impulse metrics signaling caution [2]. However, macroeconomic factors like potential Fed rate cuts in mid-September could act as a catalyst for a reversal [1]. For bulls, the launch of smart contracts—a delayed but anticipated milestone—could drive momentum above $0.08 and spark a broader rally [1].

Conversely, bears argue that KAS’s prolonged bearish trend, a 75% price drop from previous highs, and the looming supply unlock create a high-risk environment. The NVT (Network Value to Transactions) ratio, though not explicitly quantified in recent data, likely remains elevated given the token’s undervaluation relative to its transaction volume [4].

Strategic Entry Point or Red Flag?

For short-term traders, KAS presents a high-risk, high-reward scenario. A bullish case hinges on:
1. Holding $0.08: A consolidation above this level could trigger a rebound toward $0.095–$0.100, with further upside at $0.120 [1].
2. Smart Contract Launch: A successful rollout could attract new liquidity and rekindle speculative interest.
3. Macro Tailwinds: Fed rate cuts or broader crypto market rallies could lift KAS as part of a sector-wide rebound.

However, the risks are significant:
- A breakdown below $0.08 could accelerate the downtrend to $0.070–$0.060.
- The February supply unlock may exacerbate selling pressure.
- Positioning imbalances leave the market vulnerable to sudden moves.

Conclusion

KAS’s $0.08 support level is a psychological and technical battleground. While on-chain resilience and LTH confidence offer hope for a rebound, the crowded long positions and looming supply unlock demand caution. For risk-tolerant traders, a strategic entry near $0.08 could pay off if smart contracts or macro events catalyze a breakout. However, this is not a “buy and hold” opportunity—position sizing and strict stop-losses are essential.

In the words of one analyst: “KAS is at a crossroads. Bulls need patience; bears need discipline. The next few weeks will tell the tale.”

Source:
[1] Kaspa Price Stalls: Analyst Reveals KAS Trading Strategy That Could Pay Off Big [https://captainaltcoin.com/kaspa-price-stalls-analyst-reveals-trading-strategy-that-could-pay-off-big/]
[2] KAS/USDT TETHER Trade Ideas — COINW:KASUSDT [https://www.tradingview.com/symbols/KASUSDT/ideas/?exchange=COINW]
[3] Crypto Daybook Americas: FX Markets Signal BTC Upside Amid Tariff-On-Tariff-Off Trading [https://www.coindesk.com/daybook-us/2025/02/04/crypto-daybook-americas-forex-markets-signal-bitcoin-upside-amid-tariff-on-tariff-off-trading]
[4] Kaspa Price, KAS to USD Live [https://coinmarketcap.com/currencies/kaspa/]