Kaspa (KAS) is currently under significant bearish pressure, with analysts cautioning that a decline to $0.04 is possible if key support levels do not hold. The broader cryptocurrency market is experiencing volatility, largely influenced by Bitcoin’s sharp downturn, which has triggered widespread sell-offs.
Market analyst Alex Sta from Tactical Investing has expressed concerns that Kaspa’s downward trend may continue unless market sentiment shifts. Additionally, declining mining profitability and macroeconomic uncertainties are adding to investor apprehension.
The overall crypto market is facing turbulence, with Bitcoin dropping below $80,000 after previously reaching $100,000. Investors who entered at peak prices are now dealing with substantial losses.
The Crypto Fear and Greed Index has fallen to 17, marking its lowest point since Bitcoin was valued at $25,000. Sta commented on the market’s instability, stating, “People thought Bitcoin was going to $250,000, and now they’re freaking out as it drops below $80,000.”
Beyond the crypto space, traditional financial markets are also struggling. Apple’s stock has declined by 5%, Tesla has seen a 15% drop in a single day, and Nvidia, despite strong earnings, has fallen by 5%. Warren Buffett’s $300 billion cash reserve suggests that investors are preparing for potential buying opportunities.
Kaspa (KAS) Approaching Critical Support Levels
Kaspa’s price has dipped below $0.06, raising concerns about further declines. Sta identified $0.05 as a crucial support level, warning that a drop to $0.04 could make recovery significantly more difficult.
At the time of writing, KAS is trading at $0.06069, according to CoinGecko. The token has a daily trading volume of $98.1 million and has declined by 2.66% in the last 24 hours, with a 19.41% drop over the past week.
While Kaspa’s network hash rate has remained stable, trading volume for KC20 tokens has significantly decreased. Sta remarked, “If Kaspa goes below $0.05, more specifically $0.04, it’s going to be a very, very hard climb back up.”
Nacho token, a KC20 token, has seen its trading volume shrink from $60 million to $6 million, reflecting broader market weakness.
Many Kaspa miners are now operating at a loss due to rising electricity costs. Home miners, in particular, are struggling, with the Bitmain KS7 being the only profitable Kaspa miner, generating approximately $160 per day. Older mining models are no longer profitable, leading to a decline in mining activity.
Sta highlighted the financial challenges, stating, “At 10 cents per kWh, no Kaspa home miner is currently profitable. You’d need to get down to 7 cents per kWh to break even.”
Kaspa has also dropped out of the top 20 most profitable mining cryptocurrencies, further dampening miner sentiment.
Future Market Scenarios: Further Decline or Recovery?
Sta outlined two possible market scenarios. If the bearish trend continues, Bitcoin could drop to $50,000, which could push Kaspa below $0.04. However, he also”
Source: captainaltcoin.com