It appeared more likely that RUNE would consolidate, allowing time for short liquidations to build up.
- THORChain had fallen below the past month’s demand zone at $4.5. Its quick recovery showed that sellers were not dominant.
THORChain [RUNE] was up by 17.15% in 24 hours and bullish belief has swept the crypto sphere after Bitcoin [BTC] made a new all-time high against the U.S. Dollar, reaching $75.4k.
The volatility on Monday saw an intense bearish reaction from the market, but the bulls were quick to quell the fears of a bearish reversal.
The price was above the $4.76 level and was a good short-term sign, but can the bulls build from this?
Bearish market structure break for THORChain
Source: RUNE/USDT on TradingView
On the daily timeframe, RUNE has been steadily trending higher since the sharp losses in August. It maintained that trend and bullish market structure until the 4th of November.
Bitcoin [BTC] saw some turbulence and dropped to $66.8k after already facing rejection from $73.6k six days earlier.
This rejection was followed by heavy selling pressure upon RUNE that took prices from June’s bearish order block at $6.3 to $4.22 within a week.
It represented a 33.3% drawdown, and flipped the market structure bearishly.
More worryingly, the base of support that THORChain built over the past month at the $4.5 region was breached. A mitigating factor was that the OBV was stuck within a miniature range.
This was a sign that RUNE is more likely to trade within $4.5-$6.3 so long as the OBV remained within the outlined range.
Further clues of a range formation
Source: Coinglass
The liquidation heatmap showed that the cluster of liquidity that had been building up around $4.5 was swept during the recent pullback.
The sharp rebound from this region was a sign that the move was likely driven by liquidity and not by a wave of high selling volume in the spot market.
At present, there was not a clear liquidity pool that could attract RUNE. The $5.8-$6.2 region was of interest and could pull prices higher, but likely not immediately.
It appeared more likely that RUNE would consolidate below $6, allowing time for short liquidations to build up, before climbing higher to hunt them.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
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