Kaspa’s 85% Drop: Did MEXC Accidentally Reveal Market Control?

The Kaspa price got hit hard during the current market downfall and plunged to $0.065 range which is just slightly above local bottom at around $0.057 set earlier this month.

Meanwhile, ‘Kaspa Report’ X account continues to post amazing threads about what’s going on around KAS on exchanges, in this case, particularly MEXC.

MEXC’s Unexpected Revelation

Recently, Kaspalytics data revealed something interesting about MEXC’s influence on the Kaspa market. The story began when a community member noticed an unusual drop in Kaspa’s daily active supply and reported it to Kaspa Report.

Upon investigation, Kaspa Report found that the daily active supply fell dramatically at the exact time MEXC started wallet maintenance. When MEXC paused its wallet operations, Kaspa’s daily active supply dropped from 5.04% to just 0.76% – an enormous 85% decrease.

We observed that Kaspa's daily active supply abruptly dropped from 5.04% to 0.76%, roughly an 85% decrease, when MEXC paused all wallet operations for maintenance. pic.twitter.com/hJjqKeYjuD

— Kaspa Report (@KaspaReport) March 28, 2025

This unplanned maintenance effectively exposed MEXC’s outsized influence on the Kaspa ecosystem. Before this incident, it was difficult to determine exactly how much control MEXC had over Kaspa’s daily movement. The exchange’s wallet maintenance inadvertently provided clear data on their market dominance.

Kaspa Report also observed that the daily active supply rebounded around the time MEXC resumed most of its wallet activities on March 27, further confirming the connection between MEXC operations and Kaspa’s on-chain metrics.

We also observed that the resurgence in Kaspa's daily active supply occurred around the time MEXC resumed most of its wallet activities on March 27. pic.twitter.com/fOC0lx5H25

— Kaspa Report (@KaspaReport) March 28, 2025

Interestingly, even during the maintenance period, MEXC continued processing on-chain KRC-20 token transfers, though these involved minimal amounts of KAS and had negligible impact on the overall metrics. These transfers can be viewed on the blockchain through a specific wallet address shared by Kaspa Report.

Daily Active Supply Explained

The thread explained how daily active supply is calculated. Kaspalytics estimates the timestamp of each UTXO (Unspent Transaction Output) in Kaspa’s UTXO set using the DAA score. If a UTXO’s estimated age is less than 24 hours, it’s counted as part of the daily active supply.

Since daily active supply affects Kaspa’s spot price, MEXC’s sudden wallet freeze also partially revealed its control over Kaspa’s pricing dynamics. The data suggests that MEXC may be responsible for significant price manipulation in the Kaspa market.

Read also: KAS Price Crashes, But Kaspa Just Leveled Up: The Crescendo Hardfork Brings Speed, Apps, and More Power

Market Implications

While a single exchange controlling 85% of Kaspa’s daily on-chain activity raises concerns, it’s important to note that this metric alone doesn’t completely determine the Kaspa price. Exchange pricing primarily comes from order book matching, where the highest bid meets the lowest ask price.

However, the daily active supply data provides valuable insight into MEXC’s potential control over price arbitrage across exchanges. This means that much of Kaspa’s price suppression may originate from MEXC’s activities.

The Kaspa community is responding by rapidly developing infrastructure for decentralized exchanges. Their goal is for DEX volume to eventually surpass centralized exchange volume once the smart contract infrastructure is complete.

Fortunately, MEXC's actions only have a temporary impact on Kaspa's price. The Kaspa community is rapidly developing infrastructure for decentralized exchanges. Eventually, DEX volume will surpass CEX volume once the smart contract infrastructure is complete.

— Kaspa Report (@KaspaReport) March 28, 2025

Paradoxically, MEXC’s price suppression might actually benefit Kaspa’s long-term decentralization. By keeping KAS prices lower, more diverse income groups can afford to accumulate and hold the token, potentially leading to wider distribution of ownership. Kaspa Report specifically mentions that this helps those with lower incomes to invest in and hold Kaspa which could lead to a more economically diverse distribution of KAS ownership.

Despite this silver lining, the Kaspa Report characterizes MEXC’s market manipulation as “deplorable.” Beyond market manipulation, there are also reports of MEXC harassing Kaspa community members, with one account (@MEXC_KAS_Fraud) recently reporting suspicious login attempts.

Reducing dependency on any single exchange will likely remain a priority for supporters of the project.

Read also: Why Kaspa Miners Are Smiling: Massive KAS Fee Surge Signals a Price Comeback

Follow us on X (Twitter), CoinMarketCap and Binance Square for more daily crypto updates.
Get all our future calls by joining our FREE Telegram group.

We recommend eToro

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more

Visit eToro Now

Active user community and social features like news feeds, chats for specific coins available for trading.
Wide range of assets: cryptocurrencies alongside other investment products such as stocks and ETFs.
Copy trading: allows users to copy the trades of leading traders, for free.
User-friendly: eToro’s web-based platform and mobile app are user-friendly and easy to navigate.

The post Kaspa’s 85% Drop: Did MEXC Accidentally Reveal Market Control? appeared first on CaptainAltcoin.