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The entire cryptocurrency market has been making a steady recovery over the past week. Most coins have held on to their weekly gains, and while volatility is still present in the market, the uptrend has ignited speculations that the market could enter a bull market.
As some coins fight to clinch their all-time highs again, Kusama has not registered a very bold uptrend. Kusama’s gains during the past week stand at around 17%, and it is still 69.3% below its all-time high. Kusama was among the coins that failed to register a strong bullish rally during the November bull market. Kusama’s ATH of $621.71 was reported on May 18 before the 2021 market crash.
Kusama is a public blockchain network that operates under the same codebase as Polkadot. It is a canary network for the Polkadot blockchain, and it mainly runs on an experimental basis. Features that want to be unveiled on the Polkadot network are tested on Kusama. Projects that also want to launch on Polkadot test out the functionality on Kusama before migrating to the Polkadot blockchain.
Kusama (KSM) price analysis
Looking at the performance of KSM in 2022, the coin had a rough start. This coincided with the performance of the entire crypto market that dipped after news that the US Federal Reserve would raise the interest rates to tame the rising levels of inflation. This news triggered a market-wide sell-off, and Kusama was not spared.
Despite the major sell-offs across the cryptocurrency market, KSM has not dipped to the levels that were last recorded on July 21. Kusama has also maintained its yearly gains that currently stand at around 40%.
If KSM persists with the downtrend, it could push towards the July 21 lows of $149. This will be a bottom low for the coin, and if market support fails to step in, these lows could be easily reached. On February 1, Kusama dropped to a six-month low of $160. Testing these support levels triggered a bounce as short-term traders came in to book profits. The bounce was also attributed to a market-wide recovery.
If selling pressure pushes KSM to the critical support of $149 and buyers fail to step in, the token will drop towards the levels last seen in February last year. KSM will have erased its yearly gains at these levels, and it will enter into a bear market.
HODLers could witness an uptrend if resistance is formed
Currently, the market is volatile due to increased trading activity by short-term traders booking profits at low prices and selling when prices have slightly appreciated. The market is yet to record a strong bullish flag. However, there are positive developments revolving around the crypto space, and a bullish rally might not be too far away.
If Kusama wants to make a strong bullish rally, it needs to break past the resistance between the $179 and $198 levels. Over the past week, KSM’s prices have ranged at these levels. A breakout past $200 is much needed to start the recovery. If the market support holds KSM above $200, the next target will be $234.
At the time of writing, Kusama was trading at $182.84 after recording a 5.4% dip in 24 hours. Its 24-hour high stands at $192.
To learn more about this token visit our Investing in Kasuma guide.
Ali is a freelance writer covering the cryptocurrency markets and the blockchain industry. He has 8 years of experience writing about cryptocurrencies, technology, and trading. His work can be found in various high-profile investment sites including CCN, Capital.com, Bitcoinist, and NewsBTC.