Analyst Explains Why Kaspa (KAS) Price Faces Selling Pressure

Market Performance of Kaspa (KAS)

Kaspa's (KAS) recent market performance has been lackluster. The KAS price experienced a 4% decrease on Wednesday, accompanied by a 10.44% decline in trading volume. At the time of writing, KAS is valued at $0.1686.

Short-Term Holders Contributory to Price Volatility

Crypto analyst Jim, known as @Cryptographur on Twitter, attributed the selling pressure primarily to short-term holders. These investors, with a holding period of less than six months, lack conviction and are prone to selling out of fear during market downturns.

In contrast, long-term holders, who have held KAS for over six months, exhibit greater confidence due to their profitability and reduced likelihood of selling.

Chart Analysis

Jim's chart, depicting the percentage of KAS supply held by short-term holders, showed a decrease during early 2023, coinciding with increased price volatility. This behavior suggests that short-term holders are more likely to sell during price fluctuations, exacerbating the volatility.

Strong Conviction Among Long-Term Holders

Conversely, the chart tracking long-term holders' supply indicates a consistent increase, exceeding 40%. This suggests that these investors are not swayed by short-term price movements and remain confident in Kaspa's future.

Correlation Between Price Trends and Holding Patterns

The divergent behavior between short-term and long-term holders is fundamental to understanding Kaspa's price movements. As long-term holders accumulate and remain inactive, their presence reduces overall sell pressure. However, short-term holders' sell-offs driven by fear create temporary volatility.

The charts clearly illustrate this dynamic, with short-term holders selling at market dips while long-term holders provide a stable foundation, potentially contributing to Kaspa's long-term upward trend.