THORChain eyes 35% rally as RUNE confirms cup and handle breakout

THORChain, RUNE
image from thorchain.org

Key Takeaways:

  • Decentralized liquidity protocol THORChain’s native token RUNE formed a bullish Cup and Handle pattern.
  • The latter promises RUNE an additional 35% uptrend to $22.6 in the upcoming sessions.

YEREVAN (CoinChapter.com) – THORChain’s RUNE traded in a ‘Cup and Handle’ formation for over four months. The latter consists of a U-shaped dip, the Cup, and a temporary setback in a channel-formed Handle. It often formation often appears after an uptrend and predicts a continuation of the bullish streak.

RUNE after a Cup and Handle pattern. Source: RUNEUSDT on TradingView.com
RUNE after a Cup and Handle pattern. Source: RUNEUSDT on TradingView.com

The formation predicts further gains, equal to the Cup depth. Thus, the extrapolation of the Cup depth would pin the target price at $22.6.

In hindsight, when RUNE entered the pattern on May 19, it had already gained 1,644% year-to-date. As the formation progressed, the digital asset bottomed out at $3.4 on July 22. Additionally, RUNE gained 96%, after it broke out of the Handle’s upper trendline.

Additionally, THORChain’s token saw a Golden Cross between the 20-day exponential moving average (EMA-20) and the 50-day EMA. In detail, the Golden Cross occurs when a long-term moving average slips beneath a long-term moving average.

Thus, the bullish formation could bring further gains to RUNE for as long as the EMA-20 holds a dominant position.

Some experts agree with the bullish prognoses, like Mike Jenkins, a crypto analyst and the creator of Coin Bureau, a Youtube channel with a substantial following (over 1.5 million people).

Also read: Bitcoin holds $60K-support as rumors of Amazon integrating crypto payments hit markets.

Why did THORChain rally?

Mr. Jenkins noted three reasons for the recent rally. The first reason is the revival of the platform after two big hacks in July that drained over $12 million in ETH and ERC-20 tokens. The analyst noted that as more cryptos make their way into THORChain’s vaults, they will create buying pressure.

Secondly, THORchain liquidity providers depositing the crypto into THORchain vaults must pool an equivalent of RUNE for those assets too, meaning they will also buy more RUNE.

added the vlogger.

According to the analyst, the third reason behind the RUNE uptrend is that users of THORChain’s various DEX (decentralized exchange) front ends must pay all transaction fees in RUNE, which turns them into a third demand vector for the digital asset.

Also read: Solana bulls rejected Head and Shoulder advances, as SOL gains 13%

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