The Kaspa price bounced off $0.055 lows and is now trading just slightly below $0.10 range. However, despite Kaspa community being super positive about the future, let’s understand why this current pump shouldn’t get holders and potential investors too excited.
Kaspa’s price jump looks good on charts. But there’s a problem; funding rates on exchanges are still negative. This matters a lot.
Funding rates tell us who’s paying who in futures markets. Right now, short sellers (people betting on price drops) are paying long holders (people betting on price increases). This happens when more traders expect prices to fall.
So even though Kaspa’s price went up, big traders are still betting it will go down. They’re willing to pay fees to keep their short positions open. This shows they’re confident the price rise won’t last.
Despite $KAS trading around $0.09 with solid price recovery, gaining around 9% in the last 24 hours, funding rates remain negative across major exchanges.
— Kaspa Daily (@DailyKaspa) April 22, 2025
What this signals:
– Shorts are still dominant, paying longs
– Traders are leaning bearish despite the upward move
-… pic.twitter.com/SY16hmL4Js
A Divergence Worth Noting
Despite Bitcoin trading above $93k and the broader market showing strength, Kaspa’s negative funding rates stand out as an unusual sign. While altcoins typically follow Bitcoin’s lead, Kaspa traders remain skeptical.
This disconnect between Kaspa’s sentiment indicators and the overall market uptrend is concerning. It suggests that traders see something specific to Kaspa that warrants caution, even as the rest of the crypto market climbs.
The current situation creates tension that must eventually break. If more buyers step in, we might see what traders call a “short squeeze.” This happens when rising prices force short sellers to close their positions by buying back tokens, pushing prices even higher.
However, if Kaspa fails to maintain its momentum despite the favorable market conditions, short sellers might double down, causing renewed selling pressure. This could send prices tumbling back toward previous lows.
For now, smart investors should watch how Kaspa performs relative to Bitcoin and other major cryptocurrencies. If it continues to lag in sentiment despite price gains, the bears might still have the upper hand, even in this bullish market environment.
Read also: Can Kaspa Price Hit $10? Here’s What the Numbers Actually Say
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