THORChain Token Faces Downside Risks Despite Swap Volume Surge

The THORChain token (RUNE) is flashing a bearish signal, forming a bearish flag pattern that suggests further downside risks. Despite this, the network has recently recorded one of its best weeks ever, with swap volume surging 640% over the past seven days to $3.3 billion.

Network Activity and Price Movement

RUNE was trading at $1.3050 on Friday, down 82% from its November peak. It is hovering near its lowest level since November 2023 and remains 90% below its all-time high. The surge in activity on the network is linked to the recent Bybit hack, with over $240 million worth of Ethereum laundered through the network.

Weekly active addresses nearly quintupled to 5,000, up from this month’s low of 1,000, according to additional data. However, this increased activity has not translated to a positive price movement for RUNE.

Challenges Facing THORChain

THORChain is grappling with major challenges, including the recent pause of Ethereum and Bitcoin lending after its liabilities exceeded $200 million. Additionally, a core developer in the network, Pluto, announced his resignation after a vote to block North Korean hacker-linked transactions failed.

These transactions could trigger an investigation by U.S. authorities, including the Federal Bureau of Investigation. The FBI confirmed earlier this week that Lazarus Group was behind the Bybit hack.

Technical Analysis

The weekly chart shows that THORChain’s price has been in a steep downtrend since peaking at $7.50 in December. The decline followed the formation of a head and shoulders pattern, a well-known bearish reversal indicator. RUNE has fallen below the 50-week and 25-week Exponential Moving Averages, as well as the key support level at $2.5560.

Now, RUNE is forming a bearish flag pattern, a typical bearish continuation signal. A further breakdown could be confirmed if the price drops below the critical support level at $0.7790.

“ALERT: LAZARUS LAUNDERING THROUGH THORCHAIN – MINIMUM $240M SO FAR. Over $240M of ETH has been sent through Thorchain by Lazarus-tagged wallets on Arkham. These funds have mainly been swapped for native BTC.”

Tips for Investors

Investors should be cautious when considering investing in THORChain, given the bearish signals and challenges facing the network. It is essential to conduct thorough research and consider multiple perspectives before making any investment decisions.

  • Monitor the price movement and technical indicators to identify potential breakdowns.
  • Stay informed about the challenges facing THORChain and their potential impact on the price.
  • Consider diversifying your portfolio to minimize risks.

For more news and updates on the cryptocurrency market, visit Global Crypto News.

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