THORChain’s RUNE token has been on a remarkable upward trajectory in recent times. It started its climb from a low point of just under $0.80 on June 13 and has surged to an impressive high of $2.90 today, marking an astounding growth of 270%.
This surge was triggered by a breakout from a descending triangle, with momentum picking up around August 15. Despite a few fluctuations in the lead-up to October 20, the token managed another substantial increase of 90%.
Several fundamental factors are contributing to the price surge, with one significant milestone being the achievement of $3 billion in on-chain trading volume on major decentralized exchanges (DEXs).
With this substantial growth, the sustainability of this rally becomes a subject of inquiry. Is the price reaching its limit, or could it potentially surpass the $3 mark and continue its ascent even higher?
Since reaching its all-time high of $22 on May 18, 2021, RUNE has endured a bearish trend. This downward cycle eventually brought the price back to levels reminiscent of its pre-pump values in December 2020, resulting in a substantial depreciation of 97%.
The formation of a descending triangle became apparent in mid-August 2022 and persisted until June 13, marking the low point of this bearish phase. This juncture served as a turning point for the subsequent bullish trend.
An initial breakout propelled the price to $2 by August 20. However, this burst of momentum was short-lived. By October 1, after reaching a slightly higher peak of $2.25, the price faced a substantial pullback.
In hindsight, this retracement appears to have defined the fourth wave within the current cycle, clearing the path for the fifth wave, which commenced around October 20 when the price dipped to $1.51.
Currently, the token teeters on the edge of challenging a critical resistance level just above $3. However, a note of caution is warranted. With the RSI hovering around 80%, there is a suggestion of potential overvaluation.
Despite a robust trading volume, it doesn’t match the fervor witnessed during previous rallies. On its peak day, October 26, the volume reached 951k, coinciding with a 10% daily price surge. This falls short of the vigorous trading activity observed in mid-August when volumes exceeded 1.5 million, even as the price grappled to sustain its bullish momentum.
Analyzing the hourly chart reveals that although the current price wave may be approaching its peak, there is still room for potential upward movement. The price currently hovers just below the $3 mark. The absence of notable selling pressure suggests a likelihood of further upward momentum.
However, as the price edges closer to the $3.2 range, we may anticipate an increase in selling pressure, indicating the possible conclusion of the ongoing uptrend. While a 15% increase from the current levels may appear modest when viewed in isolation, when combined with recent gains, it could signify a significant overextension.
In the event that selling pressure intensifies, a notable decline might ensue, signifying the start of a broader bearish phase. This retracement could mark the initial correction within the bullish cycle, with the price potentially revisiting previous resistance levels to establish fresh support. One key support zone to watch would be the $1.80 range.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.