Kaspa (KAS) Faces Critical Turning Point as Bearish Patterns Emerge

Key Takeaways

• Kaspa is currently trading within a head and shoulders pattern.
• The price declined in the latter half of 2024, signaling potential vulnerability.
• A breakdown from this pattern could confirm the end of KAS’s bullish cycle.

Kaspa (KAS) saw remarkable growth in 2023, surging over 2,500% and maintaining its momentum into the first half of 2024, peaking at a record $0.207 in July.

However, the second half of the year told a different story, as KAS reversed course, hitting a lower high in December and struggling to rebound as 2025 began.

Now, with signs of a potential breakdown from a bearish pattern, the pressing question is whether KAS will continue its decline, signaling the definitive end of its bullish cycle.

KAS Forms Bearish Pattern

Since November 2023, KAS’s price movement has been gradual and choppy, maintaining a semblance of a bullish trend with higher highs and lows.

However, this shifted in the latter half of 2024. In October, KAS registered a lower low, followed by a lower high in December, hinting at the onset of a bearish trend.

The formation of a head and shoulders pattern further reinforces this bearish outlook. KAS is now at risk of breaking down from the pattern’s neckline. Given the pattern’s 357-day duration, a breakdown would likely confirm the start of a sustained bearish trend.

Technical indicators, including the Relative Strength Index (RSI) and the Moving Average Convergence/Divergence (MACD), support this bearish sentiment. Both indicators have displayed bearish divergences and have now dipped into negative territory, with the RSI below 50 and the MACD below zero.

If KAS breaks down from the neckline, it could face a significant decline of up to 70%, potentially dropping to the next support level at $0.040. This target is calculated by projecting the height of the head and shoulders pattern to the breakdown point.

Wave Count Predicts Downside

The wave count supports the bearish price action, suggesting that KAS will continue falling.

According to the count, KAS is in the midst of the C wave in an A-B-C corrective structure that started with the all-time high. The correction followed a lengthy five-wave increase (white), so the decrease could have a similar duration.

Giving wave C the same magnitude as wave A leads to a low of $0.084. However, an extension could take wave C down to $0.056, getting closer to the previously outlined long-term horizontal support. The latter target is more likely because of the confluence of the different support levels.

It is still unclear what will happen once KAS reaches the target, though the price may begin a lengthy downward trend after a nearly two-year increase.

KAS Starts Bearish Trend

After an impressive 2023, KAS lost its momentum in 2024 and seems to have picked up downside momentum in 2025. A breakdown from the long-term head and shoulders pattern will confirm that a bearish trend has started and could lead to a plunge toward $0.084 and possibly even $0.04-$0.056