Thorchain (RUNE) technical analysis: Breaking bearish trends

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.

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Market context

When we look at RUNE's current context, it's really clear. We've got a significant low at $1.5, where we saw a large amount of volume come in. This was a key level of support, with buyers stepping in when we were trading around that region like, we say, a scene of the crime price point.

If we pull the Fibonacci retracement from the overall context, running from the $1.5 lows to the $9.5 highs, we get a key 61.8% retracement around $4.5. This level is crucial, as it represents a significant retracement of the overall move and is holding up well in the current price action.

We can see that we've established a nice range between the key levels of $5 (a psychological number) and $4.5 (the Fibonacci level). Price is getting trapped between these two levels for now, creating a range that needs to be monitored closely.

Volume profile

• We also see a lot of volume sitting around the $4.5 level and even down to $4, as indicated by the volume profile. This shows that a significant number of participants are interested in this price range, validating it as an accumulation zone.

Bearish trend break

• We broke out of the bearish trend line that we discussed in the last analysis, which is a strong indication that momentum is shifting. This is important to watch as it shows the market is moving away from bearish control.

Current playbook

Key levels:

• $5 is acting as a key psychological resistance level. We've tested this level multiple times, and each time, sellers have stepped in. But once this flips to support, we could see a strong move higher.
• $4.5 is the critical Fibonacci retracement level (61.8%) from the larger swing low of $1.5 to the high of $9.5. This is the key level to watch for accumulation.

Short-term Fibonacci alignment

• On the daily timeframe, we pulled a smaller Fibonacci from the $4.4 lows to the recent highs of $5.7. Interestingly, this short-term Fib lines up perfectly with the 61.8% retracement at $4.5, confirming its importance.

Risk management strategy

Accumulation

• The best play here is to monitor how well the $4.5 level holds. If the price continues to respect this Fibonacci level, we could see further accumulation in this area. There's also notable volume at $4, so if the price dips, that could be another great spot for accumulation.

Cryptonary's take

RUNE has performed nicely, breaking out of the bearish trend and holding up well around the $4.5 Fibonacci level. This range between $4.5 and $5 looks like a prime spot for accumulation. As long as these levels hold, this could present a strong buy opportunity for the short-to-mid term. This is purely for educational purposes, and we are not investing in this asset.