The network announced the winner of the third parachain auction
KSM bulls take the price up to $239 in the early Wednesday session.
Technical analysis. What’s next for the token?
YEREVAN (CoinChapter.com) – Kusama (KSMO) gained 20 percent in the past two sessions, with the KSM/USD exchange rate hitting $239 in the Asian-Pacific session Wednesday. Traders raised their bids for the early experimental version of Polkadot as it announced its third parachain auction winner on July 6.
Parachain auction winners
Polkadot initiated the parachain auctions back on June 15. Gavin Wood, the founder of Polkadot and the co-founder of Ethereum characterized them as a “market-efficient way of selecting which parachains will be added to the Kusama Relay-chain and have their functionality become a part of the Kusama network.” There will be five slot auctions in total, and each auction will go on for a week.
Karura (KAR), the sister network of Polkadot’s DeFi project Acala, became the first parachain slot auction winner after raising more than 500,000 KSM coins via Crowdloans. The network will distribute KAR tokens to a total of 15,000 contributors at a minimal rate of 12 KAR per 1 KSM.
Moonriver, the Kusama version of the Ethereum-compatible smart contract network Moonbeam, emerged victorious from the second slot auction. The Kusama team tweeted that over 6,000 network participants locked up KSM tokens to support Moonriver’s bid to win the second round of auctions.
The network announced the third winner on July 6. The lucky participant is Shiden (SDN), a smart contract platform for decentralized applications.
While the parachain slot auctions continue, Kusama’s technicals could favor the bears, at least in the short term.
KSM chart technicals
The four-hour chart below showed two conflicting formations. Kusama formed a bearish rising wedge pattern. Two trendlines, constricting the trading fluctuations, have a rising slope. However, it is a reversal pattern. After KSM exhausts the formation, it could lose some of its value, as it happened with the last rising wedge formation, active from May 24 to June 14.
Moreover, the Relative Strength Index (RSI) moved above 70. In hindsight, the RSI is an overall momentum indicator that reflects how the traders perceive the price of a given stock or token. At an RSI over 70, traders consider the token overbought and might pull their assets to avoid losses. When the indicator is above the range between 30 and 70, the price is likely to correct downward.
KSM also registered a golden cross on July 5, which conflicts with the bearish outlook of the rising wedge. The formation occurs, when a short-term moving average (MA) crosses up above a long-term MA. On the chart above, the 20-day exponential MA (EMA-20: blue wave) adopted an uptrend and managed to cross above the 50-day MA. The golden cross indicates a long-term bullish cycle.
Should Kusama continue the rally, it could break through the resistance of the wedge, defying the formation.
If KSM retests the resistance instead of continuing the formation, it could fall back to the support. In doing so, the token risks plunging by 16 percent while eyeing more losses if the rising wedge reversal pans out.