Following the recent market crash, Kaia [KAIA] plunged 43% from $0.09 to a low of $0.051. However, as the broader crypto signaled recovery amid falling fear levels, the altcoin made a strong uptick.
As such, KAIA bottomed, defended the $0.05 support level, and rose to a local high of $0.0638 before slightly retracing.
As of this writing, the altcoin traded at $0.6, up 11.32% on the daily charts. This price increase was accompanied by a 74% increase in trading volume, reflecting strengthening bullish momentum.
KAIA signals recovery
After KAIA fell to $0.05, buyers stepped into the market with conviction and bought the dip. The Accumulation Map indicator in TradingView indicated increased demand for the asset.
This indicator has hovered around 7.45%-7.5% at current rates, suggesting greater accumulation following the price drop to $0.5.
Source: TradingView
At this level, the price lookedsufficiently strong to support a rebound. However, if prices fall below this area, KAIA could decline rapidly because liquidity is limited there.
Coupled with that, the altcoin’s buy volume jumped to 51.75 million compared to 36 million in sell volume. As a result, the market saw a positive buy-sell delta of 15 million, a clear sign of aggressive spot accumulation.
Source: Coinalyze
Often, higher demand has reduced supply, accelerating upside momentum, leading to higher prices.
Risk appetite returns in the market
With the market rebounding, risk appetite also surged significantly. According to CoinGlass, Open Interest increased 27.5% to $17.5 million, while derivatives volume rose 52% to $60.7 million.
The rising OI and volume suggested that investors who turned bullish were more willing to take riskier positions.
Source: CoinGlass
Even more so, the altcoin’s Long/Short Ratio bounced back above, rising to 1.18, reflecting increased demand for leveraged positions.
When this metric hits such levels, it suggests more traders were bullish and aggressively positioned themselves for price appreciation.
Can the shift in momentum hold?
KAIA successfully held the key support level as fear eased and risk appetite returned in the market. As such, investors returned aggressively across the market.
In doing so, its Relative Strength Index (RSI) rose to 49, then pulled back to 48 at press time. Although this momentum indicator failed to enter the bullish zone, a jump from 42 suggested increasing buying pressure.
Source: TradingView
At the same time, the altcoin saw a bullish crossover on its short-term moving averages before prices retraced. With these two momentum indicators showing increased demand, although in the short term.
If short-term demand holds, KAIA could flip both the 19- and 21-day MAs at $0.62 and target $0.7. However, if demand weakens and prices decline to $0.55, KAIA will breach the $0.5 support level.
Final Thoughts
- KAIA successfully held the $0.05 support level and climbed to a local high of $0.063, then retraced.
- KAIA rebounded as buyers stepped in as fear eased and risk appetite returned in the market.
