Altcoins have rallied quite well in response to Bitcoin’s rally, several times in a row this season. At the time of this writing, for example, since Bitcoin hovered above $ 51.8K, most alts were trading green on their one-day price charts. On the other hand, some alts were less affected in comparison. One such coin was Kusama which relied on Lunar for its earnings.
With coins rebounding thanks to BTC gains, is it a good time to have Polkadot and Kusama in your wallets, and what will your fate be after prices drop?
During the last week, both DOT and KSM achieved market capitalization and offered an ROI close to 35%. Previous rallies in these altcoins were primarily due to increased investment inflows, an increase in the number of active addresses, and on-chain activity.
In the case of Kusama, for example, the alt saw a price increase of almost 40% last week after the Kusama network began the second installment of the successful Kusama parachain slot auctions on September 1. As Kusama is a testnet or Canary Network for Polkadot, the price bomb was also seen for DOT, which made 37% profit after the announcement.
While the two alts saw a correlation with the price of BTC in the past, the recent pump after the parachain announcement was a sign of organic growth. The same can support the network and its price in the future. Cryptanalyst Qiao Wang made a similar observation for Polkadot, who highlighted that ecosystems such as Solana, Polkadot, and Polygon had reached “escape velocity.”
Escape velocity means there is an organically growing developer ecosystem that does not require brute force marketing or development acquisition by the core team. Polkadot achieving escape velocity, in turn, was a good sign for Kusama as well.
Trade volumes supporting rallies
Notably, coupled with good price action, both Kusama and DOT saw a massive increase in trade volumes on August 31, Kusama had its highest trading day in a year, with trade volumes 10 times higher compared to the day. previous. After that, as volumes declined, prices still held up well for the DOT, but Kusama saw great resistance at $ 400.
However, when looking at the two networks, the strength of the Polkadot and Kusama network allowed for widespread adoption and a cohesive forward movement in price. This also meant that even if there is a larger market drop and a correction follows, the two alternatives will be able to hold up well, depending on the strength of your network.
So it seems that in the near future, both Polkadot and Kusama could be a good addition to the portfolio.
This is a machine translation of our English version.
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