After a recent drop, Kaspa (KAS) shows promising signs with the formation of a double bottom pattern. Savvy investors may capitalize on this potential rebound opportunity. Check out the detailed analysis now.
The cryptocurrency market continues to experience corrections, with most major cryptos plunging into the red. The latest clash between Elon Musk and Donald Trump added additional bearish pressure, briefly causing Bitcoin (BTC) to drop to around $100,600 and Ethereum (ETH) to $2,420. This mini-correction also impacted several altcoins, including Kaspa (KAS).
After hitting a 24-hour low of $0.07968, Kaspa returned to the green. However, a weekly drop of over 10% indicates significant volatility. Despite this, Kaspa’s technical structure shows encouraging signs of a potential rebound.
The formation of a double bottom pattern on the 4-hour chart of Kaspa is a classic signal of a bullish reversal. This technical pattern often suggests a strong uptrend ahead.
The pattern began to form on May 30, with an initial decline followed by a slight recovery. However, on June 3, the price was rejected near the neckline at $0.092, leading to a second decline – the second bottom – to the day’s low at $0.079.
This double bottom could be the long-awaited turning point for Kaspa.
Additionally, the RSI on the 4-hour and 12-hour charts indicate a bullish divergence, a sign that buyers and demand are returning strongly.
If Kaspa manages to sustain its current bullish momentum and break above the neckline at $0.092, it would validate the double bottom pattern. A confirmed breakout, ideally followed by a retest, could pave the way for a potential rally towards $0.10. This would represent an increase of approximately 20% from the neckline and 30% from the current level.
In case of a decline, the POC at $0.064 could mitigate the drop to establish a bottom in the demand zone between $0.068 and $0.056.
The upcoming days and weeks will determine the outlook for KAS. However, it is primarily Bitcoin that will dictate the fate of KAS and other altcoins.
Traders will be particularly vigilant for volume and strength confirmation above this neckline. These elements will be crucial to ensure a sustainable uptrend in the coming sessions.
In conclusion, Kaspa (KAS) presents encouraging technical signals with the formation of a double bottom pattern and bullish divergences. However, the trend remains bearish until KAS breaks the protected high in the short term at $0.107.
Indeed, a protected high is a level where smart money has placed massive sell orders, anticipating resistance and pushing the price downwards.
This protected high corresponds to the last peak before the breakout of the bullish trend on May 30.
Despite the turbulence, KAS remains one of the most promising altcoins in the market. Here is a guide to get it now on Bitget:
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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