- Kava price started the year well as it rose by 25% from its lowest point in 2022.
- It rallied after the latest partnership with Axeler.
- Kava has seen its TVL crash after the USDX lost its peg.
Kava crypto price has started the year with a bang. It has risen in the past two straight days and moved to the highest level since December 29. It has jumped by more than 25% from the lowest point in 2022 giving it a market cap of more than $231 million. It is the 100th biggest cryptocurrency in the world, according to CoinMarketCap.
What is Kava and why is it rising?
Kava is a blockchain project that infuses two important technologies with the aim of creating a robust ecosystem. It combines the strengths of Ethereum, the biggest player in the smart contract industry. It has the biggest market share in industries like Decentralized Finance (DeFi), metaverse, and non-fungible tokens (NFTs).
Learn more about how to buy Ethereum.
Kava then combines it with the strengths of Cosmos, one of the top platforms in the industry. Cosmos uses the Interblockchain Communication (IBC) to help developers build fast and low-cost applications. Some of the top apps in its ecosystem are Osmosis and ThorChain.
Find out how to invest in Cosmos.
After experiencing a lot of growth in its early days, Kava has had remarkable weakness in the past few months. Its DeFi ecosystem has seen significant outflows as the total value locked (TVL) in its ecosystem plunged from more than $690 million to just $197 million.
A key challenge in Kava is a product known as Kava Mint, which is the biggest player in its ecosystem. It is a product that provides lending tools that allow users to borrow Kava’s stablecoin USDX using crypto assets as collateral. The challenge is that USDX has lost its peg and is trading at $0.82.
Other players in Kava’s ecosystem like Kava Lend, Kava Earn, Kava Liquid, Kava Swap, and Kava Boost have lost funds because of USDX de-pegging. After generating much hype, the total amount of funds in Curve is just $12 million.
Kava price rose after the developers welcomed Axeler to Kava Rise, its $750 million incentive program. Axelar creates bridges for web3 to enable cross-chain communication.
Kava price prediction
The four-hour chart shows that Kava has been in a strong bullish trend in the past few days. In this period, it has managed to move above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved close to the overbought level. The coin also moved above the Ichimoku cloud indicator.
Therefore, I believe that these gains are not sustainable. As such, I suspect that Kava will resume the bearish trend a ecosystem risks remain. If this happens, the next key support level to watch will be at $0.5678.
