Will the Bears Stop Rally?

THORChain (RUNE) price is posting green candlesticks for the second day today and is up almost 50% overall in the last 48 hours. This caused considerable discouragement for the Bears.

But could these potential developments turn the tide and put short traders in the driver’s seat?

RUNE Rising prices hurt bears.

After a 50% rally over the past two days, RUNE price has broken an important barrier and is on the verge of turning another major Fibonacci retracement level into support. However, this resulted in RUNE causing significant losses to short sellers.

Nearly $1 million worth of short contracts were liquidated before writing. This was the highest short sale liquidation since November 2023 and the highest in four months. This injected optimism is likely to result in higher call contracts being prioritized.

Open interest volume peaked at $121 million, the third highest in 24 months. This means that investors still hold a significant amount of futures contracts as of this writing. Combining this with positive funding ratios highlights that many of these contracts are likely to favor optimistic outcomes.

RUNE Price Prediction: Where Could Price Head Next?

Looking at the 3-day chart, it appears that the RUNE price has already broken the 50% Fibonacci retracement of $11.4~$1.7. This level is at $6.5 and the candle is almost breaking the $7.7 barrier. The latter coincides with the 61.8% Fibonacci retracement, which is considered bull market support.

Turning this line into support will sustain the rally and strengthen the bullish momentum. Considering investor intentions, this is a possible outcome that could push the price of RUNE up to $10.

However, the MVRV Z-Score suggests there may be some selling on the card. This indicator measures the ratio between a cryptocurrency’s market value and its realized value, indicating whether the cryptocurrency is overvalued or undervalued. A positive score indicates overestimation and a negative score indicates underestimation.

RUNE’s MVRV Z-score is well above the 2.71 threshold, suggesting that the altcoin is overvalued and may be inducing profit-taking. As a result, the RUNE price is likely to undergo a correction and fall to $6.5. Loss of this level would invalidate the optimism and send the cryptocurrency towards $4.0.