KAITO Plunges 68% in 15 Days, Wiping Out Entire July Rally

KAITO AI ($KAITO) has erased the entirety of its July price gains after declining more than 19% in the past 24 hours alone, bringing its cumulative two-week losses to 68%. The altcoin, which had been one of the standout performers during the broader altcoin market's modest July rebound, saw its price surge from approximately $0.40 in early April to $1.37 by late July — only to give back those gains in a sharp and sustained sell-off. The retracement places $KAITO back near its pre-rally baseline, effectively undoing months of upward momentum in roughly half a month.

Volume Collapse and Capital Flight

The downward move appears to be driven by a combination of post-rally correction and accelerating capital outflows. The catalyst behind the July rally was identified as InfoFi 2.0, and the current decline is seen as a correction following that pump.

Daily trading volume for $KAITO dropped from $84 million to $25 million in just four days — a reduction of more than 3x. On a weekly basis, volume fell from $541 million to $277 million, further underscoring the waning participation. Such a steep contraction in trading activity over a compressed window typically reflects diminished buyer interest following a speculative surge, a pattern observed across low-to-mid-cap altcoins after narrative-driven pumps lose momentum.

Total Value Locked (TVL) and the market capitalization of staked tokens also declined sharply. TVL plunged from $21.9 million to approximately $8 million.

USD flows reinforced the capital flight. On August 13 alone, more than $3 million was withdrawn from the ecosystem. Net outflows have dominated $KAITO since August 2.

Derivatives Data Signals Building Short Pressure

Derivatives metrics compounded the selling pressure. According to data from CoinGlass, the OI-Weighted Funding Rate has remained negative for four consecutive days, currently sitting at negative 0.4359%. This reading indicates that traders were building short-order leverage, amplifying the price decline and contributing to a full retracement of the July pump. A persistently negative funding rate signals that the cost of maintaining short positions has not yet incentivized a squeeze, keeping downward pressure intact.

Price Structure and Liquidations

The price chart exhibits an inverted V-pattern, with the apex above $1.30. Following the month-long rally, $KAITO lost its slanting support line. The Accumulation/Distribution indicator confirmed the bearish trend, showing that more than 458 million $KAITO tokens were actively being sold.

Long positions bore the brunt of the sell-off. Aggregate Liquidations data revealed that $1.25 million in long positions were liquidated, compared to just $198K in short positions. The lopsided liquidation ratio underscores the degree to which leveraged buyers were caught off-guard by the speed of the reversal.

Key Support Levels in Focus

The critical near-term support rests at $0.40 — the same level from which the July rally originated. If buyers can defend this zone, a recovery remains possible, though it would likely require a shift in market sentiment and an end to the ongoing distribution.

Failure to hold $0.40 would expose $0.266, which represents $KAITO's 2026 low. With bears currently in control, the risk of further downside persists.

In summary, $KAITO has fully retraced its July rally as distribution activity accelerates and long liquidations mount.