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KAVA Price Risks Breakdown From 480-Day Support Trendline Despite Migration to BSC

Last Updated April 30, 2024 1:27 PM
Valdrin Tahiri
Last Updated April 30, 2024 1:27 PM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • KAVA will migrate its assets to the BNB Smart Chain (BSC) on April 30.
  • The KAVA price risks breaking down from a long-term support trend line.
  • Can KAVA bounce at this trend line, or will it plunge below it instead?

The KAVA price has performed terribly since the start of 2023, increasing by a measly 27%. This is in stark contrast to other crypto coins, such as Solana, which has risen by 1,300%.

On top of its underperformance, KAVA has returned to its long-term ascending support trend line, a breakdown below which will invalidate any semblance of a bullish structure. Can KAVA finally begin a bounce, or will it break down to new lows?

What Does KAVA’s Migration to BSC Mean?

On April 30, KAVA will undergo its migration of its BEP3 assets from the BNB Beacon Chain to the BNB Smart Chain (BSC). The main difference between the two is that BSC has smart contract functionality and is compatible with the Ethereum Virtual Machine (EVM). After the migration, users can employ the Axelar bridge to convert their assets.

According to the announcement , KAVA’s migration to BSC will enhance the efficiency and increase the security of its assets. However, KAVA already boasts transaction costs of $0.0001 , so it does not seem that the transaction fees for it are an issue.

However, BSC’s compatibility with the EVM can be a very intriguing reason for the migration . This allows developers to easily migrate decentralized applications (dApps) built on Ethereum. Also, the shift to BSC can help KAVA reach a larger audience due to the visibility of the Binance ecosystem.

KAVA, a blockchain with numerous DeFi applications has fallen out of the top 100 largest cryptocurrencies by market capitalization. Also, its Total Value Locked (TVL) is at only $200 million, a far cry from its $600 million all-time high in December 2021.

Kava Total Value Locked
KAVA TVL | Credit: DeFiLlama

KAVA boasts  137 protocols for its TVL. Comparably, Gnosis, the #96 ranked cryptocurrency and a similar Layer-1 blockchain has $300 million TVL with only 65 protocols.

The interoperability with Ethereum dApps and the potential to reach a larger audience could be welcome developments that allow its TVL to increase and more established protocols to possibly migrate to KAVA.

KAVA Risks Breakdown From Long-Term Support

The KAVA price has not performed well at all since the start of 2023. While most cryptocurrencies have experienced bullish increases and some have reached all-time highs, KAVA has increased slightly over 25%.

After the $1.10 area rejected it in March (red icon), KAVA returned to an ascending support trend line that has existed for 483 days. It is at risk of breaking down from it. Since there is no horizontal support below the trend line, a breakdown can catalyze a sharp plunge.

KAVA Risks Long-Term Breakdown
KAVA/USDT Weekly Chart | Credit: TradingView

The weekly RSI and MACD give bearish readings. Both are trending downward; the RSI has fallen below 50 and the MACD has made a bearish cross (red circle). So, the weekly time frame readings are bearish, but a look at lower time frames is needed to determine if the price will break down.

KAVA Price Prediction: Wave Count Indicates Breakdown

The daily time frame outlook aligns with the weekly one, predicting a breakdown for KAVA. This is because of both the wave count and the indicator readings.

The wave count suggests that KAVA is in wave three of a five-wave downward movement (white). The sub-wave count is in black, suggesting the price has begun the fifth and final sub-wave. If the count unfolds, KAVA will break down from the support trend line, validate it as resistance and then resume its downward trend.

The daily RSI and MACD align with this bearish reading. Both are falling, the RSI is below 50 and the MACD is in negative territory. Also, the latter has nearly made a bearish cross.

KAVA Price Bearish Wave Count
KAVA/USDT Daily Chart | Credit: TradingView

If the decrease occurs, the first targets for the bottom of the movement will be at $0.50 and $0.42. Either would constitute the lowest price since 2020. Conversely, moving above the sub-wave four high at $0.80 will invalidate this count. Then, the KAVA price can move to the long-term resistance at $1.10.

KAVA Underperformance Likely to Continue

Despite the positive announcement, weekly and daily time frame both give a bearish outlook for KAVA. If the short-term wave count unfolds, the price will break down from its ascending support trend line. Since the trend line has existed for over 480 days, this could trigger a significant and sharp downward movement.

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