KAITO crashes 68%, erases its July rally – What went wrong?

The altcoin market slightly rebounded in the month of July, and $KAITO AI was an exception. The price of $KAITO rallied from a low of around $0.40 that came about in early April to $1.37 in late July.

However, $KAITO AI crashed more than 19% in the past 24 hours, thus losing 68% in just 15 days. As such, it has lost all the July gains, but what was behind this massive capital flight?

Why has $KAITO lost all of its July gains?

The decline may be due to a correction following July’s pump, which InfoFi 2.0 drove.

Additionally, the daily token trading volume has dropped from $84 million to $25 million, a more than 3x loss of capital in four days. On a weekly scale, the volume plummeted from $541 million to $277 million.

Moreover, the Total Value Locked (TVL) and the market cap of Staked tokens fell sharply. For instance, TVL plunged from $21.9 million to around $8 million.

More importantly, USD flows reinforced capital flight. On August 13 alone, more than $3 million had been withdrawn from the ecosystem. Outflows have dominated $KAITO since the second day of this month.

The derivative data further stressed the selling pressure in the altcoin. According to CoinGlass, the OI-Weighted Funding Rate has been red over the past four days with a current reading of negative 0.4359%.

This OI-Weighted Funding Rate reading suggested that traders were building short-order leverage. As such, it has amplified the price crash, leading to a full retracement.

Can the altcoin rebound from the $0.40 support level?

The price action chart displayed the inverted V-pattern with the apex above $1.30. After a month-long rally, the altcoin reached a tipping point and thus lost the slanting support line.

The trend was clear from the Accumulation/Distribution indicator, which showed more than 458 million $KAITO tokens were being sold.

To add more salt to injury, bulls’ positions were being wiped out. The Aggregate Liquidations data showed $1.25 million in longs were lost compared to only $198K by bears.

Therefore, if bulls can help price hold above the July support at $0.40, the altcoin may recover. But such a scenario would require a change in market sentiment, for instance, ending the distribution event that is ongoing.

Otherwise, if bulls lose this level, it would expose $0.266, which is $KAITO’s low for 2026. At the moment, bears are in control, and the losses may only become bigger.

Final Summary

• $KAITO AI crashed 19% in the past 24 hours, extending its two-week losses to more than 68%.
• $KAITO’s price has fully retraced its July pump as distribution gains momentum amid rising long liquidations.