RUNE is the native token of Thorchain, a decentralized cross-chain liquidity protocol that allows users to swap assets between blockchain networks. Today, Crypto Lists will discuss RUNE price estimates from a technical and fundamental analysis perspective.
The current price of RUNE stands at $1.32, which is more than 80% off from its 2022 highs that were registered in March. But where is the price of RUNE going next, and what can we expect from January 2023?
Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk and how much margin you have if trading with leverage.
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Blockchain protocol for swapping crypto-assets
Thorchain is a blockchain protocol for swapping crypto-assets that is 100% autonomous and decentralized. Thorchain was created in 2018 by a team of developers who have largely remained anonymous, and it is important to note that the Thorchain community drives much of the company’s public-facing image.
Thorchain allows you to swap between blockchains directly from your wallet, and it supports products and services that integrate the network’s cross-chain infrastructure. The protocol is run by dozens of anonymous node operators, while Thorchain maximizes revenue for liquidity providers, as well as these node operators.
“The amount emitted by the Thorchain protocol is fixed to a schedule based on the block reward calculation. Typically the payment is 67% to Nodes and 33% to Liquidity Providers, but that split can change depending on the way the Incentive Pendulum is swinging. If the network is under-bonded, node operators must increase their bonds; if it’s over-bonded, liquidity providers must pool more assets.”
– Thorchain Team
A closer look at RUNE
RUNE is the native token of the Thorchain protocol, and it is necessary for every swap on the network. RUNE can also be used as a reward for liquidity providers, to pay fees, and to secure the Thorchain network (by staking RUNE).
The current price of RUNE is more than 80% off from its 2022 highs that were registered in March, and the risk of further decline for RUNE is not over. The collapse of FTX in November raised more doubts in the crypto space, while hawkish messages from major central banks added another pressure on the cryptocurrency market. The cryptocurrency market is still heavily correlated to equities and vulnerable to macro market shifts.
Scott Wren, a senior global market strategist for Wells Fargo Investment, said that financial markets are likely to experience market turbulence in the upcoming weeks, and traders should keep in mind that the crypto selloffs could gather speed if Bitcoin falls below the $16,000 mark. Caleb Franzen, senior market analyst, and strategist at Cubic Analytics, believes that the price of Bitcoin is heading down in the direction of $14,000, and if this happens, RUNE will certainly be at lower price levels.
Technical analysis for RUNE
RUNE has weakened from $1.72 to $1 since November 06, 2022, and the current price stands at $1.32. RUNE might have a hard time holding above the $1.20 level in the upcoming days, and a break below this level would indicate that RUNE could probably test the price level at $1 again.
On the chart below, I marked the trendline, and as long the price of RUNE is below this trendline, we can’t talk about a trend reversal, and the price of RUNE remains in the SELL-ZONE.
Important support & resistance levels for RUNE
On this chart (the period from May 2022), I marked important support and resistance levels that can help traders to understand where the price could move. RUNE remains under pressure, but if the price advances above the resistance that stands at $1.80, the next target could be an important resistance level at $2. The current support level is $1.20, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $1. If the price drops below $1, which represents an important support level, the next target could be located around $0.80.
What speaks for the rise in the RUNE price?
The upside potential for RUNE remains limited for January 2023; still, if the price advances above $1.80, the next target could be resistance at $2. Fundamentals of RUNE are strongly tied to the overall cryptocurrency market (especially with Bitcoin), and if the price of Bitcoin jumps above the $20000 resistance again, we could see RUNE at higher price levels.
What indicates further downfall for RUNE?
RUNE has weakened more than 80% since the beginning of January 2022, and despite this, market participants should be ready for further decline. The outcome of the recent negative events raised more doubts in the crypto space, and according to prominent research firm Arcane Research, investors should pay attention to the ongoing financial distress related to Digital Currency Group (DCG).
“Digital Currency Group bankruptcy would be a catastrophe for markets, as liquidation of their assets would lead to selling off sizable positions in GBTC and other Grayscale trusts. Companies tied to DCG were not doing well throughout 2022 considering the massive outflow of institutional funds from the industry and the lack of liquidity could become the reason behind yet another crash of the market.”
– Arcane Research
The current support level for RUNE stands at $1.20; if the price breaks this level, the next target could be important support that stands at $1. The price of RUNE is also correlated with the price of Bitcoin, and if the price of Bitcoin drops again below the $16000 price level, that would probably have a negative influence on the price of RUNE.
What do analysts and experts say
Fundamentals of RUNE are strongly tied to the overall cryptocurrency market, which keeps it prone to undergoing additional downtrends. The consensus appears that the price of RUNE could drop even lower before reaching the bottom of the ongoing bear market. Many analysts expect a global recession that could weigh on stocks and cryptocurrencies even more, and because of this, investors should continue to take a defensive investment approach early in 2023.
Zhou Wei, the former chief financial officer of the Binance exchange and the CEO of the Coins.ph platform said that the crypto market would remain depressed for a long time, with more restrictive regulations coming following the collapse of FTX.
Disclaimer: Crypto is extremely volatile and not suitable for everyone to invest in. Never speculate with money that you cannot afford to lose. The information on this site is presented for educational purposes only and should not be construed as investment or financial advice.