Are KuCoin Shares overvalued after KCS price gains 100% in one month?

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KuCoin (KCS) costs ticked up within the early Wednesday session on July 7, partially due to an ongoing market rally throughout the highest exchange-based utility tokens.

The 72nd-largest cryptocurrency peaked for the day at $14.847 earlier than correcting decrease on interim profit-taking sentiment. The transfer draw back accompanied respectable volumes, alerting that the sell-off momentum might proceed throughout the European and the U.S. classes.

The promoting sentiment appeared greater round $15, a concrete resistance degree from the April-Might session. Supply: TradingView

On the time of writing, the KCS/USDT alternate price was roughly $14, up greater than 100% on a month-to-date timeframe (MTD).

Due to this fact, KuCoin’s bearish correction appeared as an try and neutralize its overextended upside momentum. The cryptocurrency’s relative power index (RSI) on one-day charts popped above 70 following its newest worth spikes, a studying that technical phrases the underlying asset as “overbought.”

The RSI continues to drift above 70, alerting about KuCoin interim draw back dangers earlier than it makes an attempt to interrupt above the technical resistance round $15 (as proven within the chart above).

Bullish setup

Conversely, the worth breaking out of a descending channel vary to the upside raised its prospects of extending the bullish transfer additional greater. Because the charts under illustrate, KCS trended decrease whereas fluctuating inside a falling vary—this sample seems like a Falling Wedge

Falling Wedges are bullish reversal patterns. They arrive into the image when an asset’s worth motion types a conical form whereas sloping down and forming at the very least two response highs and lows. Adjusting the KCS/USDT’s decrease trendline transfer makes an identical descending construction.

KuCoin Falling wedge setup. Supply: TradingView.com

Falling Wedge breakouts are technically skewed to the upside. Due to this fact, KuCoin’s newest resistance break, coupled with a spike in volumes, might be referred to as a bullish breakout, with its revenue goal lurking close to $19.751 (located so far as the utmost Wedge peak).

Fundamentals

KCS’s upside transfer, on the entire, appeared as part of an total worth rebound throughout the alternate token markets.

Trade tokens rally in tandem, besides SUSHI. Supply: Messari

Nonetheless, KCS markets confirmed strikingly lesser volumes within the earlier 24 hours in comparison with its exchange-token rivals. As an example, the second-to-worst quantity logged by an alternate token was roughly $620,000 (see Unus Sed Leo within the chart above). Then again, KuCoin’s 24-hour adjusted quantity was $63,531.

Skinny volumes imply that there have been fewer numbers of KCS tokens buying and selling. In flip, there was a decrease KCS liquidity throughout the markets. Consequently, an asset’s worth volatility rises in a low quantity market and makes it prone to the wilder upside and draw back strikes.

The favored analogy serves as extra headwinds for KuCoin bulls as they try to say the Falling Wedge’s revenue goal.

KuCoin Shares, or KCS, serves as a utility token on the KuCoin alternate. The platform makes use of KCS to reward customers for utilizing its companies, just like how Binance deploys BNB as a measure to supply customers reductions on buying and selling charges. Holders of KCS, in the meantime, additionally obtain a each day dividend, i.e., a KuCoin bonus, which equals 50% of the buying and selling charges on the alternate.

As KuCoin strikes to grow to be a completely decentralized platform, it plans to make use of KCS for transaction charges. The alternate additionally intends to purchase again and destroy half of KCS’s 100 million provide cap. The funds to facilitate the buyback, once more, comes from KuCoin’s buying and selling charges.

VORTECS™ information from Cointelegraph Markets Professional additionally started to detect a bullish outlook for KuCoin Shares worth hours forward of the July 7 rally.

The VORTECS™ Rating, unique to Cointelegraph, is an algorithmic comparability of historic and present market circumstances derived from a mix of knowledge factors together with market sentiment, buying and selling quantity, latest worth actions and Twitter exercise.

KuCoin Shares VORTECS™ Rating (inexperienced) vs. KCS worth (white). Supply: Cointelegraph  Markets Professional

As seen within the chart above, the VORTECS™ Rating flashed inexperienced on July 6, 21:55 UTC, with a rating of 65 with the worth persevering with to climb greater above $11.27. KuCoin-related tweet quantity queries additionally surged by 1,246.31% over the previous 24 hours.

The views and opinions expressed listed here are solely these of the writer and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, it’s best to conduct your personal analysis when making a choice.