Key Takeaways
Kaspa was one of the biggest gainers at the end of 2023, maintaining its momentum in the first half of this year. The increase led to a new all-time high price in August.
However, the trend reversed shortly afterward and KAS has fallen since, creating a lower high and breaking down from a long-term pattern. Last week, KAS reached a long-term horizontal support area.
Can the Kaspa price bounce at this support area and start a trend reversal, or is further downside likely? Let’s analyze the charts and find out.
The KAS price has declined since the Aug. 1 all-time high of $0.207. The decrease led to a low of $0.101 last week, causing a breakdown from an ascending parallel channel.
The channel existed for nearly a year before the breakdown. So, the drop below is considered a break in structure and suggests the previous movement has ended.
After the breakdown, the Kaspa price found support at $0.100, bouncing and creating a long lower wick (white icon).
Technical indicators give bearish readings. The Relative Strength Index (RSI) has trended downward for nearly a year and declined below 50, validating the breakdown.
The Moving Average Convergence/Divergence (MACD) also dropped into negative territory, indicating a bearish trend.
So, even though the KAS price trades inside long-term support, the weekly time frame chart gives a bearish outlook.
In more recent Kaspa news, the Kaspa Innovation Summit ended on Oct. 27 . It had discussions about the regulatory environment, Layer-2 integration, and the innovative KC20 tokens.
Analysts on X have a mixed view of the future KAS trend. Miles Deutscher noted the breakdown from the channel but also suggested that the price is approaching a key support level in long-term time frames.
Travladd Crypto is a huge believer in Kaspa’s potential in the long-term, suggesting it will be the future of Layer-1s. He believes that Kaspa comes the closest to solving the blockchain trilemma and gives a target between $2-5 for 2025.
Kaspa uses the GHOSTDAG algorithm to enhance scalability without compromising security or decentralization. Its algorithm is referred to as “greedy” since it does not re-check past decisions when adding new blocks. While this is key for scalability, it has sparked discussions about whether it is secure or not.
Grayscale is also considering to ad KAS to its product suite.
While the weekly time frame is decisively bearish, the daily one is more unclear. A descending parallel channel contains the decrease since the all-time high, indicating the drop is corrective.
Additionally, the movement resembles an A-B-C corrective structure (black), where waves A:C have the same length.
However, technical indicators do not support this assessment. Neither the RSI nor the MACD have generated bullish divergence, something that often happens during the end of corrections.
In the context of the long-term count, the Kaspa price may have completed a five-wave increase since 2022, where wave three extended. The sub-wave count is in black.
If this is the case, the ongoing correction is part of wave A in an A-B-C structure (white). Thus, it suggests the KAS price will bounce soon.
Breaking out from the descending parallel channel will confirm that wave B has started. On the other hand, a breakdown below $0.100 will likely mean the correction will deepen.
There are mixed signs coming from the long- and short-term Kaspa charts. Long-term readings are decisively bearish, while short-term ones suggest a bounce may occur.
However, they do not confidently predict a bullish trend reversal.
Since the wave count also indicates that the upward movement may have ended, the Kaspa price prediction leans slightly bearish.