- KAS supply on exchanges has risen to record highs while transaction numbers have remained low.
- The support level of the altcoin will determine the next price movement of KAS.
In the last 24 hours, Kaspar (KAS) is up 2.72% on the chart and the Altcoin is trading at $0.1322. However, market sentiment soon began to decline, appearing to suggest last week’s loss of 10.94% could be extended.
In fact, this bearish sentiment has been driven by unfavorable Kas fundamentals. Especially as market participants continue to lose interest in crypto assets.
Rising supply threatens KAS growth
According to Kaspalytics, the available supply of KAS across cryptocurrency exchanges has surged. In just the last 24 hours, the circulating supply of KAS reached a record of 256.2 billion KA available on exchanges. An increase in circulating supply on an exchange can increase demand.
Demand pressure occurs when the supply of an asset is not met by adequate demand, or even when the asset declines due to low demand.
Source: Kaspalytics
As KAS Supply increases, the number of transactions occurring within the same period decreases.
Additionally, the number of transactions allowed dropped from 212,920 to 50,520 on normal exchanges. This represents a 76.13% decline and indicates a potential price decline.
Normal exchanges in this scenario include all cryptocurrency exchanges except Coinbase.
It turns out that the market is starting to lose interest in KAS due to the massive decline in the number of transactions on these exchanges. This could cause a big drop in prices.
A 10% drop could be on the horizon
Currently, KAS is at a major intersection on the charts, with the altcoin trading sluggishly at $0.1276 above the support level.
Typically, support levels act as catalysts for major price pumps. However, KAS moves slowly when it hits this level, indicating weak buying pressure overall.
If this support level fails, KAS could decline by 10.47%. This pushes it towards the base of the consolidation channel at $0.1147, which closed on January 14th.
Source: TradingView
At the same time, the derivatives market has revealed that KAS can be skewed. Especially since liquidation data over the last 6 days has not been desirable for long-term traders.
As of January 18, a total of $719,900 had been forced off the market.
A large difference like this indicates that the market favors short traders, with the price of KAS likely to fall further from press time levels.