The polkadot price has struggled for the past few months, even while the parachain auctions are ongoing. DOT is trading at $ 25.50, its lowest level since September 7th. It has plummeted more than 53% from its November peak. Likewise, the Kusama price has fallen by more than 45% over the same period.
Parachain auctions
Kusama and Polkadot prices have fallen as the ecosystem goes through the biggest event of the year.
Polkadot is currently conducting so-called parachain auctions. This is an important event where members of the network can vote for their preferred projects. This coordination is done with DOT, Polkadot’s native token.
Several projects have won the auctions in the past few weeks. Some of the notable winners are Karura, Subsocial, Polkasmith, and Sakura.
In theory, Polkadot should do well during these auctions, but it doesn’t. This performance is simply due to the fact that investors expected relatively successful auctions. As a result, they bought Polkadot and Kusama before the auctions began. This is known as buying the rumor and selling the news.
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The DOT price is also struggling due to the overall performance of cryptocurrencies. In the past few weeks, most cryptocurrencies like Ethereum and Bitcoin have all slumped as investors focus on monetary policy.
As I wrote earlier, there are concerns that the Federal Reserve and other central banks are beginning to unwind their pandemic policies. The Fed is slowly ending its actions in support of the pandemic by rolling back its quantitative easing policy. She expects to start rate hikes in the coming year.
Other central banks have started to raise interest rates. This week the Bank of England surprised investors when it raised rates. Norges Bank and New Zealand’s central banks have also raised rates.
Kusama price prediction
The daily chart shows that the KSM price has been in a major downtrend in the past few weeks. Kusama managed to fall under the key support highlighted in red. That price was slightly below the lower side of the rising channel.
The coin has also moved slightly below the 25-day and 50-day moving averages. It also went back under the Ichimoku cloud. The Relative Strength Index (RSI) is also slightly above the oversold level.
Hence, there is a likelihood that Kusama price will continue to decline as the bears target the next major support level at $ 200.
Polkadot price prediction
The daily chart shows that the polkadot price has been in a strong downtrend for the past few weeks. It managed to break below the 23.6% Fibonacci retracement level. It has also moved below the 25- and 50-day moving averages. The MACD has moved below the neutral level. Hence the path of least resistance is down.
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