RUNE is currently trying to recover after expanding its downside in recent days. It also recently retested its structural support near the $3 price point.

The last time RUNE traded around the same price was on February 23 and July 21, both after major bear runs. It looks like things aren’t much different this time around, especially as the retest comes after a major downturn.

The price of RUNE has fallen about 80% from its late March high to the current support level.

Source: TradingView

RUNE was trading at $3.36 million at the time of writing, after a remarkable recovery from the low of $2.46 on May 12. The price registered a pullback from the recent local low, before closing out the day on the 0% Fibonacci support line.

RUNE price appears to be on a bullish recovery path. A short-term rally is likely to retest support near the two closest Fibonacci retracement levels on the 23.60% and 38.2% lines. This means it is likely to gain support near the $5.42 and $6.90 price levels, respectively.

Will RUNE maintain the bullish trajectory?

RUNE’s price action has been heavily oversold for the past few weeks and is on the cusp of a significant retracement. This expectation is further supported by the fact that RUNE’s RSI entered the oversold zone at its recent low. It also registered healthy accumulation which aided in the ongoing recovery.

The bullish performance over the past three days is also a sign of exhaustion from the downtrend, paving the way for the bears to take over. RUNE’s on-chain stats further align with the above observations.

For example, the “stock in the hands of whales” metric indicates that the sell-off is dwindling.

The ‘Binance Derivatives Finance’ metric confirms a recovery to normal levels, thus showing a sign of restored interest from the derivatives market.

Source: Santiment

In addition, developer activity has fallen sharply in the past five days. This is likely due to the impact of UST de-pegging, especially as developers wait for a return to normalcy.

THORChain’s latest upgrade also revealed that developers are waiting for the Terra team to provide a recovery plan.

Conclusion

RUNE’s overdue recovery may finally be here. However, this does not necessarily mean that the rally is guaranteed. The markets have proved extremely volatile and that volatility could strike again in favor of more downward pressure.



This post Why a ‘bullish’ RUNE doesn’t tell us the whole story

was published first on https://ambcrypto.com/why-a-bullish-rune-doesnt-tell-us-the-whole-story/

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