Home Altcoins News Kusama KSM Price Action Recap: What To Expect In The Next Few Days

Kusama KSM Price Action Recap: What To Expect In The Next Few Days

The Kusama blockchain is currently in one of its busiest months this year courtesy of parachain auctions which kicked off on September 1. The effect of the auctions has so far caused impressive price action on the KSM token.

KSM is the native cryptocurrency on Kusama and it is currently trading at $409 at the time of this press which represents a 2.38% drop in the last 24 hours, however still a 32.79% gain in the last 7 days. However, it is trading significantly lower than its 24-hour high of $421.7 which it achieved yesterday before experiencing some price correction.

Kusama KSM USDT

Source: Binance

KSM is currently not the best performer but its price action has been quite impressive considering that it traded as low as $266 just a week ago. Even more impressive when you look at its three-month low of $142 that happened in July, which means it is up almost 300% in the last 3 months.

Will the rally continue?

Kusama is currently on the fourth day of parachain auctions which means it is just past halfway through, thus there is a chance that the bullishness might continue. However, there will likely be more friction especially now that the cryptocurrency has entered into the overbought zone according to the RSI. It helps that the rest of the market is currently bullish, thus it might take a while longer before a major price correction takes place.

KSM will likely test new local highs in the next few days because the parachain auctions are still ongoing despite being overbought. However, it is not clear whether the cryptocurrency will reach its previous all-time high this month although that would not be surprising considering the impressive gains it has registered within a short time. It all comes down to the level of demand that the token will experience next week and after the auction period is over.

How the parachain auctions influence KSM’s demand

Parachains are customized side chains that can run any specific functions on Kusama and Polkadot and are connected to the main chain allowing them to leverage all the mainnet benefits. However, the parachains are often limited at any given time, for example, there are only six slots available currently. Auctions give all participating projects a chance to launch on Kusama or Polkadot.

The projects bid for the slots by staking or locking KSM and the higher the amount locked, the higher the chances of winning. Community members can also contribute to their favorite projects. They contribute their KSM, and get a chance to receive an airdrop of the project’s native token once the lock-up period is done. Note that all the KSM staked gets refunded.

The parachain auctions create a wave of demand for KSM by the projects and their community members, thus explaining the token’s strong rally in the last few days. The demand also creates a feedback loop as retail buyers flood in with the expectations of a strong price rally, thus pushing the price higher.  This is why it is likely that KSM will probably register some more gains in the next three days courtesy of the increased trading volume.

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Sydney Ifergan

Sydney has 20+ years commercial experience and has spent the last 10 years working in the online marketing arena and was the CMO for a large FX brokerage.

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