Despite a general uptrend in the crypto market, largely driven by Bitcoin’s recent surge, Kaspa Coin has not followed the typical trajectory.
This anomaly has sparked widespread speculation about the possibility of price manipulation, with many fingers pointing at MEXC Exchange, one of the largest holders of Kaspa Coin liquidity.
The Bitcoin Effect and Why Kaspa Coin Is an Outlier
Traditionally, when Bitcoin’s price rises, it generates a ripple effect across the entire cryptocurrency market. This phenomenon occurs because Bitcoin serves as the benchmark cryptocurrency, and its price movement reflects an influx of liquidity into the market.
Typically, altcoins, such as Ethereum, Solana, and others, see a proportional increase in value due to this liquidity trickling down. However, Kaspa Coin has not mirrored this upward momentum.
Over the past few days, Bitcoin has experienced a dramatic increase in price, yet Kaspa’s price has remained relatively stagnant. This raises critical questions: Why hasn’t Kaspa followed the market trend? Could external manipulation be the cause?
Volume Analysis: A Closer Look at Kaspa’s Trading Activity
A Year in Review: Kaspa’s Historical Volume Trends
To understand the current situation, we must first examine Kaspa Coin’s historical trading volume.
Over the past year, Kaspa Coin has generally maintained a daily trading volume of $100 million on average.
During peak market days, volumes have reached as high as $160 million to $188 million.
Even at Kaspa’s all-time high, trading volumes were relatively modest at approximately $130 million. However, recent trading data reveals a sharp departure from these historical trends. When Bitcoin’s price surged dramatically, Kaspa Coin’s trading volume exploded to $500 million in a single day, followed by an astounding $1.34 billion the next day.
This represents a significant deviation from its usual trading patterns, sparking discussions about whether this volume spike was natural or artificially induced.
The Sell Walls: Controlling the Price Ceiling
Analyzing Kaspa Coin’s order book provides further insights into the possible manipulation of its price. A sell wall is essentially a large sell order placed at a specific price point, making it difficult for buyers to push the price higher.
Kaspa Coin’s order book reveals a substantial sell wall at 13 cents, effectively acting as a price ceiling. This means that whenever Kaspa’s price approaches 13 cents, significant sell orders are executed, preventing further upward movement.
The Buy Walls: Stabilizing the Price Floor
On the flip side, Kaspa Coin’s order book also features significant buy walls at lower price points, such as 11.5 cents. These buy walls create a price floor, ensuring the coin’s value does not drop too far.
For instance, the order book shows $600,000 worth of buy orders at 15 cents, $1.3 million at 16 cents, and $1.6 million at 17 cents.
These figures, measured in USD, reveal how large players may be strategically using buy and sell walls to control Kaspa’s price movement within a narrow range.
Evidence of Manipulation: The Role of MEXC Exchange
Speculation Becomes Evidence: A Tweet Sparks Controversy
The speculation surrounding MEXC Exchange’s involvement in Kaspa Coin’s price manipulation gained traction after a viral tweet highlighted peculiar trading patterns on the platform.
According to the tweet, every time Kaspa experiences a brief pump on MEXC, the price is immediately suppressed, suggesting deliberate manipulation.
Trading Patterns: A Closer Look at Suspicious Activity
One of the most compelling pieces of evidence is the sudden appearance of large sell orders during key trading periods. For example, a 1.1 million sell order was observed at 13.1 cents, which caused the price to plummet.
Shortly after, a 1.8 million buy order was placed, driving the price back up. This pattern of large-scale buy and sell orders creates a cycle that keeps the price confined to specific ranges.
The Futures Market: A Hidden Motive for Price Manipulation
Protecting Futures Positions at the Expense of Price Growth
One possible motive for MEXC’s alleged price manipulation is its desire to protect its futures market positions.
Futures contracts allow traders to speculate on the future price of an asset. If Kaspa’s price were to rise or fall beyond certain thresholds, MEXC could incur significant financial losses by paying out profits to traders who hold winning positions.
For instance, if a large number of traders have placed futures bets at 14 cents or higher, MEXC may have a vested interest in keeping Kaspa’s price below this level. By strategically executing large sell orders, they can suppress the price, minimizing their payout obligations.
Wallet Activity: Tracking Kaspa Coin’s Movement
MEXC’s Dominance: The Largest Kaspa Wallet
MEXC Exchange currently holds the largest wallet of Kaspa Coins, with approximately 846 million coins.
Recent activity shows that 12 million coins were transferred out of this wallet in the past 24 hours.
A portion of these coins appears to have been moved to a new MEXC wallet, which now holds 9.4 million coins. This consolidation of funds raises questions about whether MEXC is managing its liquidity to influence Kaspa’s market dynamics.
The Exodus: Users Removing Coins from Exchanges
Another critical factor influencing Kaspa’s price is the withdrawal of coins from exchanges. Over the past few months, MEXC’s Kaspa balance has decreased significantly, from 1 billion coins in November to 850 million coins today.
This reduction, amounting to 260 million coins, suggests that users are increasingly moving their holdings into private wallets, reducing the supply available for trading on exchanges.
Broader Implications: What Does This Mean for Kaspa Coin?
Increased Adoption: A Growing Number of Wallets
Despite the challenges, Kaspa Coin continues to gain traction among investors. Over the past four months, the number of Kaspa wallets has doubled, from 210,000 to 421,000.
This growth indicates a rising level of interest and adoption, particularly among smaller investors.
Exchange Listings: A Glimmer of Hope
Kaspa’s future prospects also look promising, with potential listings on major exchanges like Kraken and Binance. Kraken has hinted at adding Kaspa through cryptic teasers, and Binance already offers futures trading for Kaspa, signaling growing institutional interest.
Conclusion: The Path Forward for Kaspa Coin
The ongoing allegations of price manipulation raise serious concerns for Kaspa Coin investors. While MEXC’s actions are under the spotlight, the broader takeaway is clear: removing Kaspa Coins from exchanges reduces the potential for price manipulation. By holding their coins in private wallets, investors can limit the control that exchanges have over the market.
At the same time, Kaspa’s growing adoption and increasing wallet counts demonstrate its strong community support. As more users recognize the potential of this cryptocurrency, its price is likely to reflect these fundamentals in the long term.
For now, the debate continues. Is MEXC manipulating the market, or is this simply a case of natural market dynamics? Let us know your thoughts in the comments, and don’t forget to like and subscribe for more in-depth content like this.