The Kaspa (KAS) price has been diverging from broader market trends since mid-February. While the overall crypto market was flourishing, KAS experienced significant losses, erasing a considerable portion of its gains.

Despite these substantial corrections, it appears that the altcoin may not have hit rock bottom yet, with further declines potentially on the horizon.

Kaspa Investors Likely to Retreat Since mid-February, Kaspa’s price has been consistently on the decline. This prolonged downturn has resulted in a cumulative correction of 32%. Interestingly, while the rest of the crypto market was on an upward trajectory, KAS remained in a downtrend.

This trend shift has prompted KAS holders to shift from optimism to pessimism, evident in the sharp decline in Open Interest. Open Interest reflects the total number of outstanding derivative contracts, such as futures or options, held by market participants, indicating the level of liquidity and interest in those contracts.

In the past week alone, Open Interest has dropped by approximately 31.5%, from $57 million to $39 million. The fact that this decline occurred only recently, despite the corrections happening four weeks ago, indicates a recent decline in investor interest.

Additionally, the Funding Rate has also experienced a decrease at the time of writing. The Funding Rate is a mechanism used in perpetual futures contracts to keep the market price close to the underlying asset’s spot price. Positive funding rates typically suggest traders anticipate a price increase, while negative rates indicate a potential correction. For KAS, this shift appears to be underway as rates have significantly dropped.

If the downward trend persists, these funding rates are likely to turn negative, signaling further bearish sentiment.

KAS Price Prediction: Negative BTC Correlation Could Drive Price Movement Currently trading at $0.12, KAS has lost support from the 50 and 100-day Exponential Moving Averages (EMA). With the price nearing the $0.11 support line, KAS faces the risk of further decline to $0.10, representing another 21% correction. However, stronger support may be found at the 200-day EMA, potentially offering a cushion for the price.

However, there’s a possibility for a change in KAS’s trajectory, as it shares a negative correlation of -0.40 with Bitcoin. This suggests that the altcoin tends to move in the opposite direction of BTC. With Bitcoin currently in decline, KAS could potentially see upward movement on the daily chart, reclaiming the 50 and 100-day EMAs as support. Successful attainment of this and flipping the $0.14 resistance to support would invalidate the bearish outlook.