Kaspa (KAS) is facing strong bearish pressure, with analysts warning of a possible drop to $0.04 if key support levels fail. The crypto market is experiencing turbulence, with Bitcoin’s sharp decline triggering widespread panic selling.
Market analyst Alex Sta from Tactical Investing cautions that Kaspa’s current trajectory could lead to further downside unless sentiment improves. Meanwhile, declining mining profitability and macroeconomic uncertainties are compounding concerns for investors.
The broader crypto market is in turmoil, with Bitcoin falling below $80,000 after reaching $100,000. Many investors who bought at record highs are now facing heavy losses.
The Crypto Fear and Greed Index has dropped to 17, the lowest level since Bitcoin traded at $25,000. Sta noted that the market’s volatility is causing panic. “People thought Bitcoin was going to $250,000, and now they’re freaking out as it drops below $80,000,” he said.
Beyond crypto, the financial markets are also struggling. Apple stock has lost 5%, Tesla has plunged 15% in a single day, and even Nvidia, despite strong earnings, has fallen 5%. Warren Buffett’s $300 billion cash reserve suggests investors are preparing for potential bargain opportunities.
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Kaspa (KAS) Faces Critical Support Levels
Kaspa’s price has dropped below $0.06, putting it at risk of further declines. Sta identified $0.05 as a crucial support level, warning that a fall to $0.04 would make recovery challenging.
At press time, KAS trades at $0.06069, as per CoinGecko. It has a daily trading volume of $98.1 million. The token has declined 2.66% in the last 24 hours and 19.41% in the past week.
Kaspa’s network hash rate has remained stable, but trading volume for KC20 tokens has plummeted. “If Kaspa goes below $0.05, more specifically $0.04, it’s going to be a very, very hard climb back up,” he explained.
Nacho token, a KC20 token, has seen its volume shrink from $60 million to $6 million, reflecting broader market weakness.
Most Kaspa miners are now unprofitable due to rising electricity costs. Home miners, in particular, are struggling, with the Bitmain KS7 being the only profitable Kaspa miner, generating $160 per day. Older models are operating at a loss, leading to a decline in mining activity.
Sta highlighted the cost 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 fallen out of the top 20 most profitable mining cryptocurrencies, further dampening miner sentiment.
Future Market Scenarios: More Pain or a Rebound?
Sta outlined two potential scenarios for the market. In a prolonged bear trend, Bitcoin could drop to $50,000, dragging Kaspa below $0.04. However, he also pointed to past market cycles where steep declines were followed by major rebounds.
“If Bitcoin can double after a 50% drop, altcoins could do 5x or more. We’ve seen it before with Solana in 2021,” he said. He advised investors to remain patient, as confirmation of a market bottom could take weeks.
While Kaspa remains a strong project, its price is heavily influenced by Bitcoin and broader macroeconomic conditions. The coming weeks will be crucial in determining whether Kaspa can recover or fall to new lows.
Read also: We Asked AI to Predict Bittensor (TAO) Price If Bitcoin Dips to $70K
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