Key Takeaways:
- THORChain's native token is consolidating after an impressive bull run propelled the token's prices up by nearly 108%.
- Traders remain optimist of RUNE's prospects.
NEW DELHI (CoinChapter.com) — Cross-chain DEX THORChain’s native token RUNE has been incredible for two weeks, jumping more than 108% since Mar 9.
The token is currently consolidating above the $8 support line. RUNE would need to hold above immediate support to maintain investor confidence. However, the THORChain token prices have been retracing since Mar 20, paring some of RUNE’s gains.
Longtails at the bottom of the daily candles indicate a strong presence of bulls buying the dips. But, if RUNE continues dropping part immediate support, the THORChain token could find support near its 20-day exponential moving average (red wave) at $7.3.
RUNE found support near $6.5.
The downtrend seems to result from RUNE’s overbought relative trend index. The token’s RSI clocked 69.82 on the daily charts, having pulled back from its recent overbought levels.
An overbought RSI has often been the precursor of an upcoming trend reversal, which is how it seems to have played out in RUNE’s case. As a result, traders who rely on RSI values would likely continue selling, further pushing prices downwards.
Related: THORChain risks correction after RUNE price doubles in over a week — what’s next?
However, RUNE MA lines painted a golden cross on its daily charts when the token’s 20-day EMA moved above its 200-day EMA (green wave) on Mar 22.
Traders often consider the chart pattern a buy indicator. In addition, the THORChain token’s 50-day EMA (yellow wave) and 100-day (purple wave) seem likely to form another golden cross soon. Bulls would hope the chart pattern would help arrest RUNE’s correction.
MACD Shows Weakening Bullish Momentum
If the golden crosses help RUNE avoid an overbought RSI FUD-led sell-off, the THORChain token would first flip immediate resistance near $9 before targeting resistance near $10. After that, a sustained uptrend would bring RUNE close to resistance near $11.1 before corrections pare gains.
Meanwhile, trend-based momentum oscillator MACD indicates bullish momentum is weakening for RUNE. Bars on the MACD histogram are contracting, indicating the MACD line, which is the difference of 12-day and 26-day EMA, is moving down towards its signal line, a 9-day EMA of the MACD.
If the MACD line continues its downward trend, it will cross below the MACD signal line to form a chart pattern called bearish crossover, often considered a sell signal by traders.
Traders Optimist Of THORChain’s Prospects
Traders remain optimistic of RUNE’s fortunes, considering the token’s recent correction as a normal reaction to its impressive bull run — despite the overbought RSI, weakening MACD, and a recent price correction.
Also Read: THORChain’s RUNE jumps 77% week-to-day as synthetic assets go live.
In addition, THORChain also took bullish cues from the launch of Synthetic assets on its platform. Synthetic assets are blockchain-based tokenized derivatives whose value fluctuates depending on the tokens’ reference index.
THORChain’s is the first cross-chain DEX facilitating direct transfers of native tokens on their native chains. In detail, the features make it possible for a user to trade Bitcoin (BTC) for Ether (ETH). Furthermore, the platform uses RUNE for liquidity and provisioning, as every liquidity pool must pair every deposit with RUNE.
The proof-of-bond model adds security to THORChain, as posting bonds keep the platform’s validating nodes honest.
At the time of writing, RUNE was trading at $8.33, down 1.19% on the day.
