KITE under pressure: 1.8B supply meets falling demand and rising shorts
Holders are offloading their KITE positions, altering supply dynamics, while perpetual traders increasingly position for further downside.
Kite [KITE] remains in a bearish phase as market sentiment continues to weaken. The recent decline reflects underlying structural shifts that could push prices lower in the near term.
Perpetual traders are capitalizing on this trend, increasing short exposure in ways that may exert additional downward pressure in upcoming trading sessions.
KITE fundamentals weaken as holder count drops
A key driver behind KITE’s recent decline lies in deteriorating fundamentals. The number of holders has dropped sharply after peaking at 105,420 on the 24th of March, when market capitalization reached $413.9 million.
At press time, the holder count has fallen to 104,780, while market capitalization has declined by $57 million, according to CoinMarketCap.
Despite the drop in participation, KITE’s circulating supply remains elevated at 1.8 billion tokens. This imbalance between supply and shrinking holder demand continues to weigh on sentiment.
At the same time, price action has weakened, with KITE posting a double-digit loss of 11% over the past 24 hours as of writing. Trading volume, however, has increased. Historically, rising volume alongside falling prices signals strong bearish momentum, suggesting the downtrend may extend.
Perpetual market signals growing short dominance
The perpetual futures market adds further downside risk.
Short traders have increased their dominance across KITE contracts. Over the past 24 hours, the Open Interest Weighted Funding Rate, which measures whether longs or shorts control the market, has turned sharply negative, at press time, reinforcing bearish sentiment.
The Funding Rate dropped to -1.2420%, the steepest drop since the 9th of March. On the 19th of March, a similar decline occurred, resulting in a sharp price drop from $0.29 to $0.18, indicating potential downside pressure.
Notably, capital inflows into the perpetual market have risen even as short positioning intensifies. Open Interest has increased by nearly 1% to $50.54 million, suggesting that traders are adding liquidity primarily to build short exposure.
Liquidity points to further downside risk
Liquidity data indicates that KITE may still have room to decline.
Current liquidity clusters indicate a potential move toward $0.175, where a concentration of unfilled orders exists. With minimal liquidity below this level, price may gravitate toward this zone in the short term.
If KITE stabilizes and rebounds from this region, it could target a recovery toward the $0.23–$0.24 range. However, given the prevailing bearish momentum and increasing short pressure, the probability of further downside remains higher for now.
Final Summary
- KITE’s holder count continues to decline after reaching an all-time high on March 24, coinciding with a $57 million drop in market capitalization.
- Perpetual traders are reinforcing the downtrend, with short contracts rising to levels last seen weeks ago.
