THORChain (RUNE) Creates Bullish Pattern Above Long-Term Support Area Following Recent Low of $3.01
THORChain (RUNE) has been increasing since Feb 24, so far reaching a high of $8.06 on March 15.
RUNE has been falling since reaching an all-time high of $21.28 on May 19. On Nov 2, the price created a slightly lower high (red icon) and resumed its descent.
The downward movement led to a low of $3.01 on Feb 24. The price has been moving upwards since.
An important development is the fact that the price has bounced thrice at the $3.60 horizontal support area, increasing its significance.
Therefore, the trend can be considered bullish as long as RUNE is trading above this level.
Future RUNE movement
Cryptocurrency trader @AltcoinSherpa tweeted a chart of RUNE, stating that the price could potentially increase all the way to $8.
A closer look at the movement shows that RUNE broke out from a descending resistance line after creating a double bottom. The double bottom is considered a bullish pattern, meaning that it usually leads to upward movements, as was the case here.
In addition to this, the double bottom was combined with significant bullish divergences in both the RSI and MACD. Such divergences often precede upward movements and further support the significance of the double bottom pattern.
Furthermore, the RSI has now moved above 50 while the MACD has moved into positive territory.
As a result, the trend in the daily time-frame is firmly bullish.
If the upward movement continues, the closest resistance would be between $10.20 – $11.80. This is the 0.5-0.618 Fib retracement resistance area.
Wave count analysis
The downward movement since the aforementioned all-time high price resembles an A-B-C corrective structure (black).
While the waves do not have a comparable Fib ratio, the Feb 2022 low just swept the July 2021 one (red line), making this a valid correction.
The ensuing upward movement also looks impulsive, supporting the possibility that RUNE has begun a new upward movement.
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