Over the past few months, there has been a growing demand for blockchains that can be interoperable and achieve a high level of performance. Two of these blockchains are Polkadot, and its canary network, Kusama.
Projects like Kusama have received much demand from investors and developers who want to tap into scalability. Interoperability allows blockchain networks to work together, and this is the main feature that is adding to the demand for Kusama, as a rise in the number of projects built on the network could aid in KSM’s increase in value.
Kusama attempts to gain
Kusama attempted to make a strong bullish trend during the past four days, with the price recording an over 25% surge. The price gains indicated a short-term bullish tendency by the token, which triggered buying pressure from investors looking for price gains.
However, the gains made during those four days were not enough to help KSM recover from the long-term downtrend since the beginning of the year. Kusama reached an all-time high of $621 in May last year, and it is currently 88.4% below these levels.
The only recovery that KSM has seen over the past few days is the increase in trading volumes. The trading volumes for KSM have been significantly high during the past few days, but this has not aided in a price reversal.
The moving averages show that KSM’s long-term downtrend started in December 2021. At the time, KSM had lost nearly half of its value from its record high. The token later formed a death cross with the 50 and 200-day moving averages, triggering another 74% dip in value. By the start of 2021, KSM was significantly below its ATH.
However, KSM has shown several signs of recovering its losses. In March, the token showed signs of making slight gains when its 50-day moving average nearly reached the next resistance level. However, the token reversed shortly after and formed another downtrend.
Currently, KSM is showing a significant gain in trading volumes, which could hint at a trend reversal. However, other indicators have not shown any signs that an uptrend could be formed. At the time of writing, KSM was trading at $72 after recording a 12.1% decline in 24 hours, according to CoinGecko. The decline follows a trend reversal across the cryptocurrency market.
Growing projects within the Polkadot and Kusama ecosystems
Kusama is the canary network for the Polkadot blockchain. Kusama is built on a codebase that is similar to the Polkadot blockchain. Polkadot is one of the most successful interoperable networks in the blockchain space. The network is famed for the parachain slots whose auctions have been running for several months now.
The Kusama network has been used as a testing platform for projects that want to deploy on the Polkadot network. The parachain auction slots have been secured by several projects. One of the notable developments by one of the parachain slot winners is the integration of the aUSD stablecoin on the Moonriver and Moonbeam.
This will be the first cross-network integration of this stablecoin for the Polkadot and Kusama ecosystems. Acala is the first project to win the Polkadot parachain slot auction, and it has positioned itself as a smart contract compatible with the Ethereum network. Acala is behind the aUSD stablecoin used within the Kusama and Polkadot.
Towards the end of March, Acala revealed a $250M ecosystem fund to boost the adoption of the aUSD stablecoin and boost the expansion of decentralized applications (DApps) that use the stablecoin within the Polkadot network. The fund saw the participation of several companies, including Alameda Research, Digital Currency Group, Pantera Capital, and Kraken Ventures.
To learn more visit our Investing in Kusama guide.