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Altcoins have been following in the footsteps of Bitcoin recently. These days, their charts are marked by falling market capitalizations and collapsing prices. Polkadot’s story appeared to be the same at the time of writing. DOT has lost the most value (10.07 percent) among the top ten cryptos in the market during the last 24 hours.
The cryptocurrency began its decline after reaching its all-time high of $47 in May. In reality, at the time of publication, DOT was only trading at $12.09.
Kusama has experienced the same thing. The cryptocurrency has lost more than 5% of its value in the previous 24 hours and over 15% in the last seven days. Amidst the ongoing parachain auctions in the ecosystem, its diminishing short-term ROI has been a spoilsport. Notably, past rallies in these cryptocurrencies were triggered by an increase in investment inflows, volumes, and on-chain activity. However, at the time of writing, the situation did not appear hopeful.
For starters, KSM’s trading volume value fell from $199 million to $125 million in a single day. DOT’s volume, on the other hand, has been fluctuating around the $600-$800 million area recently, after crossing the $1 billion mark several times during the first week of July.
Although the parachain auctions in the cryptocurrency ecosystem did not necessarily cause the volume or price to rise, it should be noted that members of the community have been vocal about ecosystem-centric changes on social media platforms. The same was evidenced by notable spikes in the social volume of these two alts. If this trend continues heading in the same direction, the DOT and KSM ecosystem could possibly witness the positive impact of word of mouth.
However, there is another source of concern right now. Over the last few days, DOT’s development activity has significantly decreased. The same was linked with the network’s early January levels at the time of wiring (depicted in the chart below). Even if development work does not instantly affect the price of any alt, it does have an influence on the project’s long-term viability and feasibility.
Polkadot and Kusama are ambitious projects with solid functionalities. It should be emphasised that both Polkadot and Kusama have been able to strengthen the validators network in general over the last year, and this remains critical for the alts’ future network expansion. Even if the prices of these cryptocurrencies are now struggling, the situation has the potential to improve in the long run.
Furthermore, at the time of writing, the volume of all stablecoins in the ecosystem represented a total worth of $51.5 billion. This equated to a staggering 80.59 percent of the overall 24-hour volume of the crypto-market. Such figures demonstrate unequivocally that DOT and KSM are not the only victims of the market’s volatility. As the market recovers, more investors will begin to shift their funds to classic alts, which should affect the fate of both DOT and KSM.