Kaspa Token Plummets 72% Since December Amid Bearish Momentum

Kaspa [KAS], a Layer-1 token, has been experiencing a prolonged downtrend since December, causing concern among investors regarding its price trajectory. The token's recovery from the $0.06 support level has been fragile, with bulls struggling to achieve sustained gains. Since December, KAS has failed to surpass its key resistances, and the steady selling pressure observed since 2024 has raised alarms about a potential deeper price decline.

The 1-week chart for KAS/USDT on TradingView showed a bullish breakout in December above the local highs from August and September. However, just a week after this breakout, KAS experienced a breakdown, indicating that the rally into these highs was merely a liquidity hunt. The price plummeted by 72% over four months, reaching $0.052 in March. Despite Bitcoin [BTC] rallying from $76k to $111k, KAS's bulls were unable to sustain a recovery and were once again thwarted at the local highs. The bearish order block at $0.126 from January repelled KAS bulls, sending them back to the local lows.

The Relative Strength Index (RSI) indicated bearish momentum, with a reading below the neutral 50. The On-Balance Volume (OBV) has been steadily declining since 2024, signaling consistent and significant selling volume. This is a major warning for long-term investors, indicating substantial selling pressure.

The 1-day chart for KAS/USDT on TradingView suggested some potential for a bullish reversal. A range formation between $0.06 and $0.117, with the mid-point at $0.088, was observed. The price reacted positively from the range lows and could potentially reach the $0.088-level in the coming days. However, the likelihood of such a bounce appeared low. At the time of reporting, the OBV was on a downtrend for six weeks, with the $0.08 level acting as a local resistance zone. Therefore, traders should be cautious about going long on KAS at this time. Short sellers might find opportunities to profit from a retest of the $0.088 supply zone.

Investors should exercise caution regarding KAS's long-term prospects, given the consistent selling pressure and the token's inability to break past key resistances. The bearish momentum and significant selling volume suggest that a deeper price drop could be imminent. Traders should closely monitor the $0.06 support level, as a drop below this zone could indicate further trouble and potentially re-expose KAS to its June lows. Overall, the trend structure for KAS remains bearish, and investors should approach the token with prudence.