Kusama’s native cryptocurrency KSM is one of the many victims of the latest bear market. It is down about 50% so far since early May and the high discount has crashed it to January 2021 levels.

KSM enjoyed a healthy bullish recovery in March and appeared to end the long bear run that started in November last year. However, the recovery was short-lived after peaking at $207 on April 2, after which bears regained control. KSM fell to $62.3 this week thanks to strong selling pressure. It pushed past the key $118 support level before dropping below $100.

It looks like KSM is ready for a bullish recovery

KSM’s deeply discounted price tag makes it a good candidate for bullish recovery. Any benefit would at least be expected to provide resistance to the 2,618 and 1,618 Fibonacci retracement levels. They correspond to the $101 and $143 price levels respectively.

Interestingly, KSM saw a 21.15% rise in value over the past day. It was additionally at press time switching wallets for $80.67.

Source: TradingView

Note that the Fibonacci retracement levels take into account the latest low, without taking into account any additional downsides. At the time of this analysis, KSM’s RSI was deep in the oversold zone at 26.91, suggesting a potential bullish recovery. The MFI also pointed to significant outflows in recent weeks, but it was within the accumulation zone at the time of writing.

Source: TradingView

Expectations of a bearish reversal are further rationalized by the ADX and -DI. They confirmed the strong bearish momentum, but the extended downside and ADX divergence highlighted the increased likelihood of a reversal.

KSM’s historic price action reveals that it always bounces after more than five consecutive bearish daily candles. The last bear market resulted in seven consecutive red candles.

So KSM should prepare for recovery if history repeats itself. Whale supply has so far increased in the last 24 hours. The funding rate for FTX derivatives also showed a sharp recovery from the recent dip, indicating a recovery in confidence in the derivatives market.

Source: Santiment

The current circumstances seem to work in favor of the bulls. However, the markets have proved unpredictable thus far and therefore the unexpected can still happen.

In this, the unexpected would be another price dip, potentially pushing KSM below $60. Ultimately, the outcome will depend on whether there will be another negative market shock.



This post Will Kusama [KSM] defies further sell-off amid crypto market contagion

was published first on https://ambcrypto.com/will-kusama-ksm-defy-further-selloff-amid-crypto-market-contagion/

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