NEW DELHI (CoinChapter.com) — THORChain (RUNE) has been soaring for nearly a month. The cryptocurrency’s price has risen around 250% to around $5.25, compared to its Oct. 20 low of $1.50.
Why is THORChain (RUNE) Price Up Today?
Several factors contributed to the THORChain token’s price action.
For instance, RUNE’s price increase was part of a broader rally in the cryptocurrency market, led by the Spot Bitcoin ETF euphoria. Positive news and trends in the broader crypto space often have a ripple effect on individual tokens, contributing to their price increases.
However, it remained unclear if the ETF hype directly impacted RUNE price action. Traders could be reacting to developments within the THORChain ecosystem that might indirectly relate to the Bitcoin ETF hype.
Furthermore, THORChain became the third-largest decentralized exchange (DEX), marking a significant milestone. THORChain’s trading volume has rallied since Oct. 20. In the week beginning Oct. 30, THORChain recorded a total trading volume of $656 million between Oct. 30 and Nov. 5.
Per data from DefiLlama, the DEX hit a trading volume of $1.32 billion between Nov. 6 and Nov. 12, a week-over-week spike of 101%. Interestingly, THORChain achieved the milestone much earlier than the platform’s core developer, Chad Barraford, had anticipated.
General Market Recovery And Increased Interest In DeFi Helped RUNE Price Action
RUNE price has had a mostly positive price action since June 2023. The token surged significantly from around $0.7824 in June to over $5.50 in November, a more than 540% increase.
Oct. 2023 saw a recovery phase in the broader cryptocurrency market as altcoins began recovering after a prolonged bearish period.
Moreover, increased interest in the DeFi sector and cross-chain solutions benefitted THORChain. Since Oct. 20, the total value locked in DeFi projects has grown by more than 27% to reach $46.7 billion on Nov. 13.
The DEX helps facilitate cross-chain exchanges without using wrapped or pegged assets, which eases trading for users. Additionally, THORChain introduced some new updates in its Q3 2023 report.
THORChain’s Q3 2023 Report Added Bullish Cues For RUNE
Another reason for RUNE’s rally could be the release of the THORChain Q3 2023 Ecosystem Report in Oct. 2023. The report detailed significant ecosystem updates that could have positively influenced investor sentiment.
The report stated that THORChain saw a total trading volume of $2.38 billion between July and Sept. 2023, an increase of 114% on the previous quarter. THORChain’s increased trading volume suggests increased user interest in the exchange.
Furthermore, the DEX announced new features in the report, such as streaming swaps and loans. Streaming swaps break down large swaps into smaller, multiple sub-swaps that the platform executes over time.
Streaming swaps help lower the liquidity fee for large transactions. Moreover, traders can enter or exit a loan using streaming swaps. Streaming swaps has also helped increase the platform’s swap volume and the APRs offered to liquidity providers.
Enhanced platform features often increase usage and demand for a project’s native token.
Moreover, RUNE price’s sustained rally likely created a positive feedback loop as investors searched for alternative investment options amidst speculations of the altcoin sector heading for a crash.
RUNE Price Moving Inside A Bullish Pattern
Meanwhile, another bullish cue for RUNE prices is a technical pattern called the ‘Falling Wedge,’ which the THORChain token’s price has formed.
A narrowing price range and converging trend lines characterize the pattern, which typically indicates a potential reversal of the current downtrend.
Two downward-sloping trend lines that converge as the price lowers, drawn by connecting the price action’s lower highs and lower lows, create the pattern. The trading volume usually decreases as the pattern develops, but a breakout must happen with high volumes.
The height of the back of the wedge determines the price target of the pattern. As such, RUNE’s price could rally over 1,784% to reach the pattern’s theoretical price target near $98.
THORChain Technical Analysis
The recent RUNE price run has pushed the THORChain token’s RSI into the overbought region, clocking a score of 88.02 on the daily charts. An RSI score above 70 usually suggests that the underlying asset’s price has risen sharply and likely reached an unsustainable level in the short term.
As such, traders often view overbought RSI levels as a signal that the bullish momentum is reaching its peak, and the asset might be due for a trend reversal or corrective price pullback. However, THORChain bulls have ignored the RUNE’s price overbought status for nearly three weeks.
The bears’ profit booking has not diminished RUNE’s bullish pressure, with the token’s price rallying nearly 5.4% to reach a daily high near $5.3.
If RUNE prices continue to rally, the token could reach the resistance near $5.95. Moreover, breaking and consolidating above the immediate resistance level might help RUNE price target the resistance near $6.9.
Conversely, a correction could force RUNE’s price to tumble to the support level near $4.33. A breakdown below the immediate support might see RUNE price test the 20-day EMA (the red wave) support near $3.5 before recovery.
