Why Did Kaito Price Drop 20%: X’s InfoFi Ban Cut Off Core Utility

The Kaito price fell sharply in today’s session, sliding more than 20% as the market responded to a sudden breakdown in the token’s core utility model. The move followed X’s decision to ban reward-for-posting InfoFi applications and revoke API access tied to incentivized engagement, a direct hit to the mechanism that previously drove Kaito’s usage and demand.

Following the news trigger in the market, Kaito price reacted sharply and an aggressive selloff pushed Kaito price below its major support zone of $0.700. 

However, attention has now shifted whether Kaito price can establish relevance under a materially altered framework.

What Went Wrong For Kaito?

Kaito’s sell-off was driven by a direct break in its utility model, not market sentiment. The token’s demand had been closely tied to its InfoFI-based rewarded engagement system, with Yaps serving as the primary link between user activity and token flow. Once that mechanism was shut down, the market was forced to reassess how much organic demand remained.

Kaito Price Analysis: Breakdown, Not Correction

Kaito’s price drop of over 20% within a few hours since the InfoFi ban has shown a structural breakdown, not a normal price correction. Kaito price has broken its major support zone of $0.700 and slips below it, currently trades at $0.5444, representing bearish momentum.

This decline has come with notable technical signs of distribution. Looking at the price structure, Kaito price has been facing rejections multiple times from its descending trendline zone and this time again, but in an aggressive manner. 

For the past few weeks, Kaito token has been forming lower lows and trades in a bearish trend, below its short-term moving averages. At present, the Kaito price is heading close to its make or break zone of $0.4600-$0.4700.

If buyers defend this zone, a short-term sideways movement would be seen, while a break below the zone may deepen the correction toward the key demand zone of $0.3600-$0.3800.

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On-Chain Supply Dynamics Shift Against Kaito

With the InfoFi narrative now impaired, Kaito’s price behaviour is increasingly dictated by supply flows rather than future expectations.

On-chain data points to a near-term increase in liquid supply, as approximately 4.6 million Kaito tokens are scheduled to exit staking in the coming days. While unstaking does not automatically translate to selling, it materially raises the pool of immediately tradable tokens at a time when demand has weakened.

Beyond the short-term additional supply pressure looms from scheduled team and early backer unlocks expected in the weeks ahead. In parallel, exchange-bound transfers activity has risen during the recent decline, signaling positioning rather than accumulation.

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