KAITO Reversal Sends Price Tumbling By 25%, Now Battling to Hold Critical Support

Key Takeaways

• KAITO has dropped 25% in the past week, falling below the $2 mark and currently trading at $1.71 after a 100% rally in May.
• LOUD’s poor post-launch performance (down 75%) negatively impacts KAITO sentiment and could drive further downside.
• MACD shows a bearish crossover, but if a bullish reversal occurs, KAITO might reclaim the $2, targeting the 0.618 golden ratio.

KAITO’s momentum has stalled after surging by over 100% in May. Over the past seven days, the token has dropped by 25% and is currently trading at $1.71.

The decline stems from heightened selling pressure, which pushed KAITO below the key $2 support level.

With the recent dip, traders are now focusing on what lies ahead. In this analysis, CCN explores the potential next moves for KAITO and what factors could influence its short-term price action.

KAITO Rally Falters

On the 4-hour chart, KAITO’s price broke below the demand zone at around $1.83 — a key support area that helped propel the altcoin to a swing high of $2.35 in May.

The recent decline has been driven by increasing selling pressure, as reflected in the Chaikin Money Flow (CMF). On May 27, the CMF posted a reading of 0.36, signaling substantial accumulation that supported the earlier rally.

However, the current market structure tells a different story. As of press time, the CMF has dropped to -0.32, indicating that selling pressure has overtaken accumulation, signaling a bearish shift in momentum.

Like the signs shown by the CMF, the Awesome Oscillator (AO) has dropped to the negative region. As seen below, the AO, which measures momentum, has flashed five consecutive red histogram bars.

This reinforces the bullish momentum around KAITO. If this trend continues, KAITO’s price might drop below $1.70, which is the next underlying support.

LOUD Collapse Drags the Altcoin Into Trouble

Beyond the technical outlook, the increase in selling pressure can also be attributed to the disappointing performance of LOUD, a cryptocurrency launched under the Kaito Network.

Before its debut, LOUD generated significant hype. However, since its launch earlier this week, the token has plunged by 75%. On June 2, LOUD’s value was $0.17. As of this writing, its price has dropped to $0.030.

Should LOUD fail to attract enough demand to erase the decline, KAITO’s price might also struggle. If that is the case, then the altcoin risks another double-digit correction.

KAITO Price Analysis

The Moving Average Convergence Divergence (MACD) has formed a bearish crossover on the daily chart. In blue, this happened as the 12-period Exponential Moving Average (EMA) crossed below the 26 EMA (orange).

This bearish crossover indicates that KAITO’s price is unlikely to rebound quickly above $2. Instead, the cryptocurrency risks dropping below the 0.382 Fibonacci level at $1.53.

If that happens, the next target for KAITO could be 1.20 at the 0.236 pullback point. Should the broader market conditions worsen, the cryptocurrency risks dropping to a new all-time low.

On the contrary, a bullish crossover could invalidate this forecast. If that were to happen, KAITO might jump to $2 near the 0.618 golden pocket ratio.