Kaspa [KAS] on a long-term downtrend? Here’s why it should worry investors!

• KAS has threatened and failed to break past its key resistances since December
• Steady selling pressure since 2024 means investors should remain cautious of a deeper price drop

Kaspa [KAS] tested the lows from March over the weekend. However, it did manage to climb higher since Monday. Even so, the Layer-1 token has not had a bullish outlook on the higher timeframes since December last year.

The 1-week chart highlighted a bullish breakout in December above the local highs from August and September. Just a week after this breakout, KAS broke down, proving that the rally into these highs was a liquidity hunt.

The price tumbled by 72% in four months, hitting $0.052 in March. As Bitcoin [BTC] rallied from $76k to $111k, KAS attempted to recover. However, its bulls were not strong enough. Once again, they were stymied at the local highs. The bearish order block at $0.126 from January rebuffed KAS bulls, sending them to the local lows once again.

The RSI highlighted that momentum was bearish, with a reading under neutral 50. The OBV has been sinking steadily since 2024 too, a huge warning for long-term investors that selling volume was consistent and significant.

What next for KAS traders and investors?

The 1-day chart underlined some potential for a bullish reversal. A range formation (white) between $0.06 and $0.117, with the mid-point at $0.088, was observed. The price reacted positively from the range lows, and could hit the $0.088-level in the coming days.

And yet, the chance of such a bounce appeared low. At press time, the OBV was on a downtrend for six weeks, with the $0.08 level acting as a local resistance zone. Hence, traders need to be wary of going long on KAS right now. Short sellers might be able to profit from a retest of the $0.088 supply zone.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion