Kaspa (KAS) at a Crossroads: Bullish Bounce or Deeper Correction?

Kaspa (KAS) has entered a critical phase as its price tests key support levels following a sharp decline from an August all-time high of $0.107 to a recent low of $0.07968. Technical analysts and on-chain data suggest the cryptocurrency could be positioning for a potential rebound, though long-term bearish trends persist. The price action has drawn attention from traders and investors, with mixed signals emerging from short- and long-term timeframes.

The KAS price has formed a double bottom pattern on the 4-hour chart, a classic bullish reversal signal observed after hitting a 24-hour low of $0.07968. This pattern, first identified on May 30 and reinforced by a subsequent rebound on June 3, suggests a possible short-term recovery. If KAS breaks above the neckline at $0.092, analysts project a potential rally toward $0.10, representing a 20% gain from the neckline and a 30% move from the current level . However, the pattern’s validity hinges on volume confirmation and sustained momentum above this threshold.

Longer-term indicators remain bearish. The weekly chart shows seven consecutive bearish candlesticks, with KAS breaking down from a long-term ascending parallel channel. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) both trend downward, with the RSI below 50 and the MACD below zero, reinforcing a bearish bias . If the current support at $0.082 fails, the next target is $0.050, a level that would signal a deeper correction.

On-chain data provides a nuanced outlook. Despite the price decline, Kaspa’s hash rate has surged to 1.41 exa hashes, a 330-day high, indicating growing miner interest. This divergence between hash rate and price suggests undervaluation, though it does not guarantee a reversal . The token’s third birthday on November 8 could also influence sentiment, as community-driven projects often experience renewed activity around milestone events.

Short-term bullish catalysts include a “Power of 3” setup observed on the 4-hour chart. This pattern, characterized by accumulation, manipulation, and expansion phases, suggests KAS could enter an expansion phase if it reclaims the $0.079 level. A decisive break above $0.092 would validate the pattern, with a projected target of $0.1130, implying a 54% upside from current levels . However, a breakdown below $0.07141 would invalidate the setup and invite further downside.

Market participants remain divided on KAS’s near-term trajectory. While the short-term technicals point to a potential relief rally, the broader trend remains bearish until KAS reclaims the parallel channel. Analysts caution that any rebound could be temporary, with renewed selling pressure likely if macroeconomic factors, such as geopolitical tensions, reintroduce risk-off sentiment .

The KAS price slump has also impacted its market profile. Trading volume, though steady, lacks the buying strength seen during earlier rallies. The 20-day exponential moving average (EMA) failed to hold as support during the recent dip, further weakening the case for a sustained recovery. Meanwhile, the MACD’s recent bullish crossover has lost reliability due to the price’s inability to maintain gains above key resistance .

In conclusion, Kaspa’s price is at a crossroads. The formation of bullish patterns on lower timeframes and growing miner interest hint at a possible bounce, but structural bearishness on the weekly chart and weak momentum indicators suggest caution. Traders will closely monitor the $0.082 and $0.092 levels, with outcomes likely shaping the token’s near-term direction. For now, the market remains in a wait-and-see mode, balancing hope for a rebound against the specter of deeper corrections.