Kaspa (KAS) has recently surged, capturing investor attention with significant capital inflows that have put the layer-1 token on watchlists. Yet, a closer examination of market dynamics reveals a conflicting narrative: the rally, primarily fueled by derivatives, appears to diverge sharply from crucial on-chain metrics, raising serious questions about its long-term sustainability.
Derivative Momentum vs. Underlying Risk
The recent uptick in KAS's price is largely attributed to a robust influx in its derivative market. Open Interest (OI) for Kaspa saw an impressive 42% increase within just 24 hours, reaching $66.92 million. This significant inflow, largely driven by bullish investors opening new contracts as evidenced by a positive OI Weighted Funding Rate, reflects strong short-term confidence. However, analysts caution that a rally fueled predominantly by high leverage rather than organic market demand carries inherent risks, making prices vulnerable to sharp declines if sentiment shifts.
On-Chain Data Flashes Warning Signs
In stark contrast to the bullish derivative activity, Kaspa's on-chain data presents a more cautious outlook, suggesting a distinct lack of fundamental support for the current rally. Unspent Transaction Output (UTXO) readings are notably negative, signaling investor distribution rather than accumulation, indicating a reluctance to hold the asset for extended periods. Furthermore, active addresses have plummeted by an alarming 97.72%—from over 500,000 to a mere 11,770 in a short span. This drastic reduction, coupled with decreased account balances and network activity, points to weakening investor confidence and casts a significant shadow over the sustainability of KAS's recent price ascent. This skepticism extends to the spot market, where retail investors have recently divested approximately $1.3 million worth of KAS. However, analysis of non-zero KAS wallets reveals a surprising resilience: approximately 54.84 million addresses have consistently held KAS since early November. This stability in the number of holders suggests that while the current derivative-driven momentum might be fragile, a dramatic, catastrophic collapse in KAS prices is unlikely, potentially pointing towards a phase of consolidation rather than a complete market capitulation.
