Key Takeaways:
- Kava Network's KAVA token risks losing 85% of its valuation.
- Several other technical cues point in a bearish direction.
- The Network gets ready for the Kava 11 upgrade on Aug 31.
Yerevan (CoinChapter.com) – Kava Network’s same-name utility token held on to a support at $1.6 and put on nearly 10% on Aug 29-30. As a result, it traded at $1.74 in Tuesday’s European session. However, the digital asset risked losing 85% of its valuation based on a bearish setup.
Bearish setup for KAVA
In detail, KAVA’s daily chart painted a ‘descending triangle,’ which features a flat support line, a descending resistance, and a significant mid-range. Typically, the descending triangle is a continuation pattern, which means after the asset exhausts the pattern, it is likely to adopt the bias preceding the formation.
As the token suffered a 30% drop before the triangle formed, there might be more pain ahead, as the target price stands at $0.24, 85% lower than the current value.
As shown in the chart above, KAVA could bounce back to the formation’s resistance. However, the decline in trading volumes supported the bearish claim. In detail, dropping trading volumes indicate traders’ low return expectations from the asset.
Moreover, like many altcoins, it depends on the overall market bias and the broader economy.
Also read: KAVA eyes a 50% drawdown ahead of a Network upgrade – what’s ahead?
Additionally, the chart printed a so-called ‘death cross’ between the 20-day exponential moving average (EMA-20; red wave) and the EMA-50 (orange wave). The formation forecasts a bearish phase ahead for as long as the short-term MA stays below the long-term MA.
That Upgrade
On June 30, the Kava Network team announced the version 11 update would officially launch on August 31. The upgrade will include features such as Metamask support, KAVA liquid staking, Protocol Owned Liquidity, and the Kava Earn.
Stakers can liquid stake their KAVA to create a staking derivative that will earn them additional rewards on top of their normal staking rewards.
specified the roadmap.
According to the Network’s roadmap, the upcoming events include an ETH bridge launch and a Kava Foundation launch in Q3.
Kava aims to become the default DeFi platform by providing stablecoins and decentralized lending against all major crypto assets. Thus, the upgrade might boost the token in the upcoming session, which does not go against the overall bearish technical forecast.
