Journalist
Posted:
- RUNE lost gains in August as profit-taking increased.
- Open interest has fallen by more than 35% in the past seven days.
After several weeks of price appreciation and upward divergence with the rest of the market, THORChain [RUNE] has started to decline and has become active with the biggest drop in the past week, data shows CoinMarketCap showed.
How much are 1,10,100 RUNEs worth today?
In August, RUNE outperformed the rest of the cryptocurrency market, rising 66%.
This was mainly due to two factors: first, RUNE has a low positive correlation with Bitcoin [BTC]whose price fell by 10% in the same period, and secondly, THORChain, the decentralized liquidity network on which RUNE is the native token, implemented a series of protocol updates.
However, with profit-taking activity gaining momentum, RUNE’s price is down 11% over the past seven days.
Natural correction after recent gains
An indication of the profit-taking activity among RUNE investors was the Moving Average Convergence Divergence (MACD), observed on a daily chart. The indicator caused a downward crossover of the trend line through the MACD line on September 22, confirming the start of a new bear cycle.
This is a bearish signal because a downward crossover of the trendline indicates that momentum is shifting downward.
Furthermore, RUNE’s distribution has outpaced accumulation, with key momentum indicators pointing south, suggesting the downtrend is likely to continue.
Although still positioned above their respective midlines, the token’s Relative Strength Index (RSI) and Money Flow Index (MFI) shortened their uptrend as the price started to decline. Should sentiment become increasingly bearish, these indicators could fall below their midline and move towards oversold zones.
Furthermore, the token’s Chaikin Money Flow (CMF) returned a negative value of -0.01 at the time of writing. A CMF value below the zero line is a sign of weakness in the market because it is a sign of increased liquidity exit from the spot market of an asset.
Source: RUNE/USDT on TradingView
Realistic or not, here is RUNE’s market cap in BTC terms
Maybe now isn’t the time
Despite the price increase in August, RUNE’s open interest witnessed a steady decline. When the price of an asset rises while open interest in the futures market declines, it generally indicates that a relatively small number of buyers are driving the price rise and that there is not much new money flowing into the asset.
At $50.78 million at the time of writing, RUNE’s open interest has fallen 36% over the past week, data from Mint glass showed. With a downward price correction underway, participants in the token’s futures markets may no longer be incentivized to enter trading positions for the time being.
Source: Coinglass
