Kaspa is at a critical juncture. Can KAS break through resistance or face a reversal?
Kaspa has experienced an impressive rally but now faces significant resistance levels that could limit its momentum.
On-chain indicators are sending mixed signals, leaving the market uncertain about KAS’s next move.
Kaspa [KAS] has become one of the best performing crypto assets, gaining 11.92% in the past 24 hours as buyer interest grows.
This momentum has continued across all time frames, with KAS up 6.43% over the past week and 27.15% over the past month.
While optimism about breaking new all-time highs remains, conflicting market sentiment continues to cloud the outlook, making KAS’s next move difficult to predict.
KAS faces challenges on road to recovery
KAS’s recent upside came after a breakout above a major descending trendline pattern that had restrained its price gains five times in a row.
Despite the breakout, KAS is currently facing significant resistance at the $0.1750 level, a price point that has repeatedly served as a barrier to further upward momentum.
If KAS manages to break above this resistance, it could set a new all-time high above the press time price level of $0.2079.
Conversely, if bearish sentiment prevails, the asset could fall back to the downtrend line pattern, curbing further progress.
To determine KAS’s next move, AMBCrypto analyzed other market indicators. However, the sentiment among market participants remains mixed.
Bulls and bears battle for control
The current market sentiment highlights a tug-of-war between bulls and bears, with both sides actively influencing price action.
At the time of writing, Coinglass’ funding rate and open interest suggest conditions favorable for continued gains, albeit with underlying bearish overtones.
The funding rate, which measures the cost of maintaining a balance between spot and futures markets, is currently 0.0200%.
A positive funding rate indicates that long positions (buyers) are paying short positions (sellers) to maintain balance, which generally signals bullish sentiment and the potential for rising prices.
Meanwhile, open interest surged 22.12%, reflecting an increase in the number of active contracts.
This indicates increased activity in the market, with longs holding a significant portion of these contracts, with a total value of $124.95 million at press time.
Despite the bullish indicators, bearish activity is evident in the recent long liquidations, especially on the shorter time frames.
Long liquidations occur when price action moves against buyers, triggering their stop-loss orders and accelerating downward pressure.
On the 1-hour chart, $907,800 worth of long contracts were liquidated, while only $69,700 worth of short contracts were liquidated, amplifying the bearish momentum.
In 24 hours, liquidations of long positions reached $2,616,100, reflecting continued bearish pressure.
The long-short ratio is 0.9048, which means there are more short contracts than long contracts in the market.
This imbalance often makes the market vulnerable to corrections as the majority positions become overexposed.
Although the bulls are trying to regain control and push the price higher, the growing influence of bearish activity suggests a possible reversal or increased volatility in the short term.
