Why is RUNE bouncing back?

The Thorchain (RUNE/USD) price rose for the second straight day as activity in its network continued rising. The coin rose to a high of $8.520, which was about 17.7% above the lowest level this week. Its market cap has risen to over $2.5 billion, making it the 51st biggest cryptocurrency in the world. 

What is Thorchain and why is it rising? 

ThorChain is a leading decentralized exchange (DEX) based on the Cosmos SDK. Its distinguishing factor is that it uses the Cosmos Inter-Blockchain Communication (IBC) protocol. This is a network that enables multiple blockchains to communicate with one another.

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IBC solves a major challenge that exist in the blockchain industry. For one, assets minted on Ethereum cannot be traded directly in other chains like Solana, Avalanche, and Cronos. To trade them, one needs to use a centralized platform like Coinbase or Binance. 

Alternatively, one can use a bridge, which can be an unsafe process to do that. Another alternative is to use tokenized assets like Wrapped Bitcoin or cEth among others.

ThorChain solves these challenges by creating a platform where people can trade digital assets in a decentralized way. It achieves this using Bancor’s continuous lending pools to facilitate transactions. According to its website, it has a total value locked (TVL) of $1.1 billion. It has 38 liquidity pools and has helped facilitate swaps worth over $5.8 billion.

Another reason why the ThorChain price is rising is that the network is building synthetic assets. These are assets based on other products like stocks, forex pairs, and commodities. As a result, most investors believe that the demand for RUNE will keep rising in the coming months because of these products.

ThorChain price prediction

The daily chart shows that the RUNE price has been in a bearish trend in the past few days. After soaring to a high of $13.1 on March 31st, the price dropped to a low of $7.23. It has moved slightly below the 38.2% Fibonacci retracement level and is between the 25-day and 50-day moving averages.

At the same time, the Relative Strength Index (RSI) has moved below the neutral level of 50. Therefore, the coin will likely keep falling as bears target the support at $6.51.

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*Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.