Why the KCS Token Price Rally May Not Continue | Airdrop Alert Pro

KuCoin Token has become the best performer in the cryptocurrency market, surging 3% in the past 24 hours. This price increase brought significant profits to a portion of its short-term holders (STH).

However, the nature of these investors is often to take advantage of rapid price movements, which poses a potential threat to the sustainability of KCS’s recent gains. This analysis details why.

Short-term holders put KuCoin tokens at risk

KCS has noticed Trading volume increased by 376% in the past 24 hours, pushing its price up by 3% during the period. Many KCS STHs are now profitable as a result of this rate hike, which is reflected in their MVRV long/short spread readings. At the time of writing, the price is trading at a 30-day low of -7.98%.

An asset’s MVRV long/short differential measures its relative profitability between long-term and short-term holders. When the value of this indicator is positive, it indicates higher profits for its long-term holders, indicating bullish sentiment and the potential for further price appreciation.

On the other hand, as with KCS, a negative divergence indicates higher profits for short-term holders (STH), indicating bearish sentiment and the possibility of a price decline. These investors typically hold assets for shorter periods of time and are more likely to sell their tokens at a profit during short-term price fluctuations.

Additionally, despite KCS price gains, its price DAA (Daily Active Addresses) divergence indicator only flashed a sell signal today.

This suggests that while prices are climbing, network activity is not supporting the gains, hinting at underlying weakness. If this trend continues as speculative traders take profits, a KCS price reversal is imminent.

KCS Price Forecast: Bearish Divergence Points to Potential Reversal

An assessment of the KCS/USD one-day chart suggests that a bearish divergence may be forming between KCS/USD. Altcoin Prices and its chai cash flow (CMF). As of press time, the indicator is in a downward trend at 0.01 and is preparing to fall below the zero line.

An asset’s CMF measures the flow of funds into and out of its market. When it falls during such a price rise, a bearish divergence forms. This divergence suggests selling pressure is building and could derail the sustainability of the upward momentum.

If KCS’s CMF falls below zero, confirming an intensification of the selling, its price will reverse the current trend and drop to $10.15.

However, this bearish outlook will be invalidated if buying pressure increases. In this case, the price of KCS is likely to break above the $11.42 resistance, climbed to $13.82.