KV is a global persistent data store, so reads and writes may have to cross the internet. In comparison, the Cache API reads and writes from the local datacenter's cache. Also, Cache API doesn't cost extra (KV does).
However, better than either of these is to formulate your outgoing fetch() calls such that they naturally get the caching properties you want. fetch() goes through Cloudflare's usual caching logic. When that does what you want, it works better because this is the path that has been most optimized over many years.
There isn't really any magic here. If your resources or API are naturally cacheable using generic HTTP caching logic, then it's best to use fetch() and rely on that rather than try to re-implement the same logic with cache API. But if the default logic isn't a good fit, cache API makes sense.
KV is a global persistent data store, so reads and writes may have to cross the internet. In comparison, the Cache API reads and writes from the local datacenter's cache. Also, Cache API doesn't cost extra (KV does).
However, better than either of these is to formulate your outgoing fetch() calls such that they naturally get the caching properties you want. fetch() goes through Cloudflare's usual caching logic. When that does what you want, it works better because this is the path that has been most optimized over many years.