Kaspa (KAS) has been trending within bullish market structures for the second consecutive year, presenting a promising opportunity for traders to capitalize on its momentum. With the price surging around 120% since this year's low, concerns about buying at high valuations may arise.

However, technical indicators suggest a favorable risk-to-reward ratio, making it more beneficial to ride the trend rather than attempting to predict a reversal.

Daily time frame analysis

KASUSD - 1 Day Time Frame

Liquidity was initially withdrawn at the beginning of August, but the market response didn’t provide the necessary confirmations for entry. After closely monitoring the price, the required technical parameters have now been met in September.

The recent re-selection of sell-side liquidity has triggered a strong bullish reaction, forming a solid support zone in the process.

When to buy Kaspa?

In the past few days, the price has corrected downward following a bullish movement, creating attractive buying opportunities.

For this trade setup, it is essential to place limit orders strategically. A stop-loss should be set just below the internal low, while the take-profit should target the external high, which also aligns with the buy-side liquidity level.

If the price closes below the support zone (marked in blue on the chart) on the daily timeframe, traders should consider selling the majority of their positions. This is because the likelihood of reaching the buy-side liquidity level diminishes significantly, and a further decline due to re-selection of sell-side liquidity becomes more probable.

By following these parameters, traders can optimize their entry and exit strategies while mitigating risk in the Kaspa market.