Is Shorting Kaspa (KAS) a Strategic Move in Q3 2025?

The Bearish Case: Technical Indicators and Supply Constraints

Kaspa (KAS) has emerged as a focal point for volatility-driven traders in Q3 2025, with conflicting signals creating a high-risk, high-reward environment. While some analysts highlight bullish momentum from the recent Crescendo upgrade and moving average crossovers [1], the broader technical landscape remains heavily bearish.

1. Structural Weakness in Price Action
KAS is currently forming a Cup and Handle pattern, a classic continuation pattern that often signals exhaustion in bullish trends. The price has tested a critical resistance zone between $0.0995 and $0.1000 multiple times without a decisive breakout. A failure to surpass this level—coupled with 22 downward-pointing technical indicators versus only 4 bullish ones [1]—suggests a high probability of a retest of lower support levels. If the price falls below $0.0917, the next target is $0.0818, with a 65% retracement of the August 2024 all-time high acting as a final line of defense [3].

2. Supply Shock and Liquidity Risks
A unique risk factor for KAS is its supply shock: 90% of the total token supply has remained stagnant for over a month, with less than 3 billion coins in circulation [2]. This illiquidity amplifies volatility, as even minor sell pressures could trigger sharp corrections. Historical precedents show that tokens with such constrained liquidity often experience “flash crashes” when key support levels are breached, making KAS a double-edged sword for short-term traders.

3. Options Market Sentiment
Derivatives data further reinforces the bearish bias. In June 2025, KAS saw only micro-lot call trades, with open interest concentrated at a $0.20 strike price [4]. This suggests that options market participants expect limited upside potential, effectively pricing in a ceiling for the asset. Meanwhile, the absence of significant put activity indicates underestimation of downside risks—a classic precursor to volatility spikes.

Volatility as a Profit Opportunity

The compressed volatility environment, as indicated by narrowing ATR bands, presents a strategic window for short sellers. If KAS fails to break above $0.10, the ensuing breakdown could trigger a cascade of stop-loss orders near the $0.0917 support level, accelerating the decline. Traders could hedge against false breakouts by using tight stop-loss orders just above $0.10 or employing volatility-based position sizing (e.g., scaling into shorts as ATR expands).

However, caution is warranted. A successful breakout above $0.10 could invalidate the bearish case, targeting $0.12 as a psychological hurdle [1]. This duality underscores the importance of real-time monitoring of on-chain metrics and order-book depth.

Conclusion: A Calculated Short-Term Play

Shorting KAS in Q3 2025 appears strategically viable for traders comfortable with high volatility and structured risk management. The confluence of bearish technical indicators, supply-side constraints, and options market skepticism creates a compelling case for a short bias. Yet, the asset’s potential for a breakout—driven by the Crescendo upgrade and speculative buying—demands disciplined execution. Position sizing, trailing stops, and a focus on liquidity events (e.g., large on-chain movements) will be critical to navigating this volatile landscape.

Source:
[1] Kaspa (KAS) price right now, KAS to USD real-time price [https://www.droomdroom.com/price/kaspa-kas]
[2] Kas supply shock and volatility expected [https://www.facebook.com/groups/kaspakas/posts/1466257371392449/]
[3] Kaspa crypto price analysis and prediction [https://www.facebook.com/groups/kaspacommunity/posts/24229534743401073/]
[4] Crypto Roars Back: Inside the June 23 Rally and Altcoin ... [https://digitalcurrencytraders.com/crypto-roars-back-inside-the-june-23-rally-and-altcoin-options-frenzy-97ece8837966]