THORChain’s native token RUNE has defied the downturn seen in Bitcoin and Ethereum, as it soared by 30% in just one week. While leading coins like Bitcoin and Ethereum experienced price drops, RUNE emerged as the cryptocurrency asset with the highest gains.
One of the factors contributing to RUNE’s recent price rally is its low positive correlation with Bitcoin. While BTC’s value declined by 11% in the same period, RUNE managed to surge by almost 30%.
At the time of writing, RUNE is trading at $1.69. A closer look at its price movements reveals a significantly bullish sentiment among daily traders. The market has been in a bull phase since August 8, with the Moving Average Convergence/Divergence (MACD) indicator confirming the upward intersection of the MACD and trend lines on that day. This intersection signaled the entry of the bulls and since then, the value of RUNE has climbed by an impressive 88%, according to data from CoinMarketCap.
The positive directional index (green) standing at 36.75 has consistently remained above the negative directional index (red) at 5.09. This setup of the asset’s Directional Movement Index indicator indicates a strong bullish signal, suggesting that the upward price movements are stronger than the downward ones.
Furthermore, the Aroon Up Line (orange) is currently at 85.71%, indicating the strength of the ongoing price uptrend. The Aroon indicator is commonly used to identify trend strength and potential reversal points, and when the Aroon Up line approaches 100, it signifies a strong uptrend with recent highs reached.
Despite the positive outlook, some indicators suggest a potential downward price correction. The wide gap between the upper and lower bands of the Bollinger Bands indicator points to concerning volatility in the altcoin, making it susceptible to significant price swings in either direction.
Additionally, key momentum indicators such as the Relative Strength Index (RSI) and Money Flow Index (MFI) are currently at overbought highs. At values of 77.79 and 83.41 respectively, it becomes challenging for buyers to sustain further price rally, potentially leading to a decline in RUNE’s value.
Traders on the futures market at leading exchange Binance are predominantly opening short positions against RUNE’s price since August 15.
In conclusion, while RUNE’s recent price rally has been impressive, there are indications of potential correction. Traders and investors should closely monitor the altcoin’s performance and consider these factors before making any investment decisions.
