Technical Analysis

THORChain (RUNE) technical analysis: $4 breakout - 3 key Levels for Bullish accumulation?

Updated: Aug 30, 2024

Published: Aug 29, 2024

Following the last analysis on RUNE, there hasn't been a significant shift in market mechanics. There's no new bias suggesting any headwinds, concerns, or implications that need to be addressed. However, while price action hasn't evolved dramatically, there are still a few key points that deserve our attention.

Market context

Lower highs on the daily time frame formed a bearish trend which has been broken out of as shown by the red bearish trendline.

May 20th/21st: We set a lower high in the ongoing bearish downtrend.
July 30th: Another lower high was established.
August 20th: A third lower high formed.

On August 23rd, RUNE broke out of its bearish trend and crossed above the $4 mark, which was the upper boundary of our accumulation zone ($3.2 to $4). This breakout is crucial because it marks a potential shift in short-term market structure from bearish to bullish.

The $4 level, previously resistance, has now turned into a support zone, indicating a positive change in market sentiment as long as we stay above the red trend line that previously served as resistance.

The-chart-shows-the-daily-price-movement-of-RUNE-against-Tether-US-with-trend-lines-support-levels-and-accumulation-zone-1024x522

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

Current Playbook

Hypothesis

RUNE's breakout above $4 suggests a shift in short-term market bias. This development reinforces our confidence in the $3.2 to $4 accumulation zone. Historically, these levels have provided substantial rallies, and with the recent price action, it's becoming more likely that this zone will continue to be a strong foundation for potential market recovery.

Key levels

$3.2: A critical historical support and key accumulation zone. This level has been pivotal in the past, triggering significant bullish surges. $4.00: Previously a resistance level, now a support. Holding above this level could indicate the start of a new upward trend. Risk Management:

Spot accumulation

Continue building a spot position within the $3.2-$4.00 range. This approach avoids the risks associated with leverage, allowing you to weather market swings and hold for long-term gains.

Leverage strategy: If considering leverage, stick to light positions (2x or 3x). Ideally, wait until the price moves closer to the $3.2 level before entering, as this minimizes risk. Place stop losses below $2.553 to protect your position. This strategy assumes that the probability of price dropping to these levels is low, making it a strong setup for those willing to take on additional risk.

The-chart-shows-RUNE-against-Tether-US-price-movement-with-marked-resistance-points-accumulation-zone-trend-lines-and-stop-loss-1024x522

Cryptonary's take

Alright guys, there isn't a whole lot new to discuss when it comes to RUNE's market mechanics, but what's important is that it's holding strong around the critical $3.2 to $4.00 accumulation zone.

This level has historically been a launchpad for some serious bullish rallies. The recent breakout above $4 could be a sign that we're shifting from a bearish trend into something more bullish in the short term, which only strengthens our confidence in this key zone.

If you're looking to accumulate, the $3.2 to $4 range is still a solid foundation for long-term gains. And for those considering leverage, stick to light positions (2x or 3x) and manage your risk carefully, especially as we get closer to that $3.2 level.

Even though there's not a ton of new developments, RUNE's current setup looks like a prime opportunity for strategic accumulation as we get ready for what could be a solid market recovery.