Why Kyber’s Security Alert Is Moving Markets
Kyber Network recently put out an urgent advisory asking liquidity providers to pull their funds from KyberSwap Elastic after spotting a potential vulnerability. The good news? No one’s lost money yet. The bad news? Investors aren’t waiting around to find out. The token dropped more than 2% as people rushed to withdraw, and the Total Value Locked in Elastic collapsed from about $108 million down to roughly $61 million almost overnight.
These kinds of security scares tend to spook the market, even when no actual exploit happens. It’s a bit like a fire alarm going off in a crowded building—people don’t stick around to ask questions. For KNC holders, that’s meant short-term pain and a lot of uncertainty about what comes next.
On the brighter side, Kyber hasn’t been sitting idle on the development front. The team recently integrated its FairFlow liquidity protocol into PancakeSwap Infinity pools, letting liquidity providers earn KNC rewards plus arbitrage profits. That’s a solid move for long-term utility, but right now, nobody’s really focused on the roadmap when there’s a vulnerability warning flashing red.
What the Technical Picture Is Telling Us
As of now, KNC is trading at around $0.23174, down about 2.23% in the last day. If you pull up a 4-hour chart, the first thing that jumps out is the RSI sitting at roughly 20.8. That’s deep in oversold territory—the kind of reading that usually suggests the selling is overdone and a bounce might be coming. But here’s the thing: oversold doesn’t always mean “buy now.” Sometimes it just means “falling fast.”
The moving averages aren’t doing KNC any favors either. Both the Simple Moving Average (around $0.24581) and the Exponential Moving Average (near $0.24523) are sitting above the current price, which is textbook bearish momentum. The MACD on the 4-hour is also negative, with the MACD line below the signal line, confirming that sellers are still in control for now.
Looking at the daily pivot points, there are a few key levels traders should keep an eye on. On the upside, resistance is stacked at roughly $0.2372 (R1), $0.2420 (R2), and $0.2449 (R3). On the downside, support zones come in around $0.2295 (S1), $0.2266 (S2), and $0.2218 (S3). For any meaningful recovery, KNC needs to clear that first resistance at $0.2372, and that’s going to take some real buying volume.
The Patterns Underneath the Surface
There’s a bit of a negative divergence showing up here. The RSI is low, but price action hasn’t shown any strong reversal candles yet—just continued drift downward. That suggests exhaustion rather than a springboard for recovery. Add in the TVL collapse and the withdrawal advisory, and you’ve got a recipe for continued technical weakness unless something changes fast.
If there’s no positive catalyst—like a clear fix to the vulnerability or reassuring communication from the team—KNC could easily test lower supports. That means watching $0.2266 (S2) closely, and if that breaks, $0.2218 (S3) becomes the next line in the sand.
What Comes Next for Traders and Long-Term Holders
For short-term traders, the oversold RSI does hint at a possible bounce in the next 24 to 48 hours. If buyers step in, we could see a move back toward the $0.2370 to $0.2450 range—that’s roughly 2.5% to 6% upside from here. But that only works if there’s no more bad news and if volume starts to pick up. Without that, any bounce is likely to get sold into.
If selling pressure continues, the next stop is probably $0.2266 (S2). A break below that level opens the door to $0.2218 (S3), which could act as a temporary floor. Traders should consider using stop losses below S2 and wait for clearer signs of stabilization—like a bullish reversal candle or a push above R1 with strong volume—before jumping in.
For long-term holders, the focus should be on how the team handles this situation. Transparent communication, a credible audit, and a solid patch will go a long way toward restoring confidence. The fundamentals—like the FairFlow integration, governance features, and cross-chain expansion—are still intact. If Kyber can navigate this rough patch, there’s room for recovery. But right now, the risk is real, and patience is key.
