Kadena (KDA) Retreats Amid Calls To Ban Proof-of-Work Mining
Kadena (KDA) continues to slide amid worries about a potential crackdown on proof-of-work (PoW) mining.
PoW Mining Is in Spotlight Due to Energy Shortage and Climate Change
The token of the PoW blockchain made an attempt to settle above the $17 level back at the end of December but lost momentum and declined towards the $7.00 level.
While crypto markets have been under pressure due to rising Treasury yields and fears about aggressive rate hikes from the Fed, it looks that there is an additional catalyst in Kadena’s decline.
The Vice-Chair of European Securities and Markets Authority (ESMA) Erik Thedéen has recently called for banning of the PoW mining due to concerns over energy usage and climate change.
It remains to be seen whether such calls will have any material impact on the dynamics of Bitcoin. Bitcoin makes up over 40% of the total crypto market cap, and many funds have positions in the world’s leading cryptocurrency. In this light, it is not easy to ban Bitcoin without consequences for financial markets. However, a war on smaller PoW projects is easier, and it looks that traders are worried that Kadena’s value proposition may hurt the project if regulators increase their efforts against PoW.
KDA Tests Important Support at $7.50
KDA managed to settle below the support level at $8.40 and is testing the strong support at $7.50. In case KDA manages to settle below this level, it will move towards the next support level at $6.50.
A successful test of the support at $6.50 will push KDA towards the support at $5.75. In case KDA declines below this level, it will head towards the next support level at $4.85.
On the upside, the previous support at $8.40 will serve as the first resistance level for KDA. A move above this level will push KDA towards the resistance which is located near the 20 EMA at $9.50.
Taking a look at H1 chart, we can see that RSI has moved away from the oversold territory, so there is plenty of room to gain additional momentum if KDA settles below $7.50.