Why Is Kaspa (KAS) Price Dumping While Bitcoin Breaks Above $72,000

In a YouTube video, the crypto analyst from Tactical Investing, examined the current market conditions surrounding Kaspa (KAS), particularly in light of Bitcoin’s surge past the $72,000 mark.

While many altcoins are experiencing upward momentum, Kaspa has faced a notable decline, dropping over 6% in the past 24 hours, with even steeper losses seen in the preceding days and month. The analyst probes the potential reasons behind this downward trend, suggesting it may stem from a confluence of factors rather than a singular cause.

Potential Reasons Behind Kaspa’s Price Decline

The YouTuber points out that although Bitcoin is nearing an all-time high, Kaspa’s performance starkly contrasts this positive trend. He raises questions about the various influences contributing to Kaspa’s price drop, indicating that the situation is complex and multifaceted

One significant factor the analyst describes is the limited trading options for Kaspa within the United States. He mentions Pionex US as a pioneering platform providing regulated Kaspa trading, commending its features, such as AI trading bots, low fees, and promotions for traders engaging with the Kaspa pair.

The analyst outlines three specific elements he identifies as contributing to Kaspa’s underperformance compared to other cryptocurrencies. Despite these pressures, the YouTuber considers the drop a temporary setback that may last several days to weeks, asserting that the core technology and fundamentals of Kaspa remain intact.

Read Also: Top Analyst Predicts Bitcoin (BTC) Price Rally to Over $400K as Key Indicator Turns Bullish

Technical Analysis of Kaspa’s Price Movement

Utilizing a four-hour chart, the crypto analyst describes Kaspa’s historical pattern of hitting highs followed by sell-offs, especially when encountering resistance levels. He notes that recent resistance points did not sustain upward movement, indicating bearish pressure.

In his analysis, he discusses both bullish and bearish signals that have historically signaled price movements.

The YouTuber delves further into Kaspa’s price behavior, pointing out a recurring pattern of corrections following new highs. He cites specific instances of past corrections—35%, 46%, and currently around 47%. This cyclical behavior suggests that Kaspa experiences corrections more rapidly, akin to the shorter cycles seen in Bitcoin halving events.

Identifying a key support level around $0.10, the YouTuber believes this could represent a favorable entry point for potential investors looking to capitalize on Kaspa’s future prospects

Impact of Fundamentals

The influence of Marathon Digital Holdings, a publicly traded mining company with substantial Kaspa holdings, is another crucial aspect of the YouTuber’s analysis.

He notes that Marathon has sold portions of its Kaspa to balance its portfolio and cover operational costs, such as energy expenses for mining. This selling activity may have contributed to the downward pressure on Kaspa’s price.

The crypto anaslyst also discusses the impact of the volatile KRC20 meme coins, suggesting that fluctuations in this sector could lead some investors to liquidate their Kaspa holdings to invest in these meme projects, further exacerbating selling pressure.

The crypto analyst reassures viewers that the factors driving Kaspa’s recent price decline are likely short-term and do not fundamentally alter the project’s long-term potential. He acknowledges the inherent volatility of the crypto market and suggests that Kaspa may still experience additional corrections before it can reach new highs.