ThorChain’s native token, RUNE, has been experiencing a significant downturn recently. Currently trading at $1.136, the token has been hit hard since reaching its all-time high of $13 in March earlier this year.
This marked decrease, amounting to a more than 90% loss in value, underscores the high-risk nature of the asset. Yet, despite the steep descent, we believe indicators are pointing towards a potential short-term bullish trend.
RUNE — Technical Indicators
The technical indicators for RUNE, however, might seem slightly contradictory. The Relative Strength Index (RSI) currently presents a neutral reading. This suggests that the market isn’t strongly favoring buyers or sellers. A neutral RSI can often indicate a period of consolidation before a trend emerges.
Regarding Simple Moving Average (SMA) and Exponential Moving Average (EMA), both indicators are projecting a solid downtrend or downtrend across all time horizons. This primarily reflects RUNE’s significant price depreciation over the past few months.
On the other hand, the Moving Average Convergence Divergence (MACD), often used to identify potential buying and selling opportunities, is signaling bearish momentum. The Average Directional Index (ADX), a tool used to quantify trend strength, reads neutral, suggesting that the market currently lacks a clear direction.
Interestingly, the Momentum (MOM) indicator offers a bullish perspective. This divergence from most other indicators can sometimes hint at a potential reversal.
RUNE — Outlook & Trade Setup
Despite the bearish indicators, the 4-hour chart exhibits an upward trend channel for RUNE. At the moment, RUNE has hit the bottom of this channel and appears to be reversing.
Should the channel pattern hold, we could potentially see RUNE adding about 5.5% to its value until it meets the resistance at $1.2. However, given the market conditions and the weight of the downward pressure, breaking this resistance seems unlikely at this point.
For traders looking to benefit from this potential upswing, setting a target slightly below the $1.2 resistance would be wise. This approach will maximize the probability of your trades reaching the target while avoiding strong resistance.
About ThorChain (RUNE)
ThorChain (RUNE) is a decentralized liquidity protocol that facilitates the trading of digital assets across various networks without necessitating the surrender of custody. It utilizes continuous liquidity pools, ensuring users can seamlessly swap assets at fair market prices. Despite its current downturn, ThorChain remains an innovative project in the DeFi landscape, and its performance will be monitored closely in the future.
In Summary
RUNE, the native token of ThorChain, has suffered a sharp decline, shedding more than 90% of its value since reaching its yearly high in March. Despite this, technical analysis of the 4-hour chart shows a potential short-term bullish trend, offering an opportunity for traders. While the overall outlook remains bearish, a short-term gain of 5.5% could be achievable if RUNE maintains its upward channel pattern.
However, setting a target just below the $1.2 resistance level may be a prudent strategy, given the intense selling pressure likely at this point. As always, careful market monitoring remains critical in this high-risk environment.