Polkadot (DOT) and Kusama (KSM) Face Price Crash as NFT Event Starts
Polkadot (DOT) and Kusama (KSM) are barely above annual low months and may soon break down, accelerating the decline.
On Thursday, as part of Berlin Blockchain Week, nine of the Polkadot ecosystem’s top projects came together to host a conference and a non-fungible token (NFT) gallery. The event will feature some of the best artists who have graced NFTs at Polkadot and Kusama.
DOT
DOT has been sinking below a descending parallel channel since reaching a record high price of $55.09 in November 2021. The downward movement led to a low of $6 in July. Afterwards, the subsequent bounce validated the $6.60 horizontal area as support (green icon).
Despite the bounce, DOT has returned to the support area again. In addition, it risks falling below the center of the parallel channel.
So the price may collapse. This possibility is supported by the weekly RSI, which is below 50 and consistently declining.
The daily chart shows that the DOT has fallen below a descending resistance line since early May. It was rejected by the resistance line on August 12 and has been falling ever since.
In addition, DOT fell below the horizontal area of $7.70, which has now been validated as resistance (red icon). Finally, the daily RSI has now moved below 50.
Therefore, due to these bearish readings, a breakdown from the previously outlined horizontal support area seems to be the most likely scenario. A breakout from the descending resistance line would invalidate this possibility and suggest that an upward move is imminent.
For now, this seems unlikely.
KSM
Like DOT, KSM is barely holding above its yearly lows of $46. So far, the area has been tested four times. Since horizontal levels become weaker each time they are touched, an eventual breakdown from this area would be expected.
Furthermore, the daily RSI has broken down from the 50 line and validated it as resistance, supporting the possibility of a breakdown.
If a breakdown occurs, the nearest support levels will be at $36.10 and $27.05 respectively. These are found by the 1.27 and 1.61 Fib retracement levels of the previous up move.
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