THORChain (RUNE) Stands Tall With a Stellar 16% Rise

After dropping below $27,000 on Thursday, Bitcoin has extended its losing streak. It’s now been down for a fifth consecutive day, starting from last weekend when it failed to break the $28,000 resistance.

Now, it is to be seen if Bitcoin will continue its descent today on Friday the 13th, which is considered unlucky. In fact, it has actually been historically bearish for the S&P 500, while Bitcoin, in contrast, has historically performed positively on this date. 

Statistically speaking, since 2010, BTC price has increased 1% on average on this day, but more importantly, prices have surged an average of 14% and 66% in one and three months following these Fridays.

However, given the ongoing sentiments and broad market structure, the crypto space seems primed for more losses and not gains.

At the time of writing, BTC is trading at $26,765, and the total crypto market cap sits at $1.083 trillion, while the second largest cryptocurrency, Ether, is exchanging hands at $1,545 after touching a seven-month low at $1,523.

Given Ether’s weak performance, investment advisory firm ByteTree recommended that investors cut the crypto asset’s weight in their portfolios as it continues to struggle. 

“ETH is a fabulous long-term project but, at the same time, is losing its spark as an investment,” wrote ByteTree analysts in a report, citing the diminishing amount of tokens burned, lower network revenues from fees, and the gradual decline of staking yield as reasons for the same.

“All these combined factors impose bearish pressure on ETH, and given the continued underperformance, we believe it is prudent to reduce exposure,” said the analysts.

Ether is actually at a critical point, and if the crypto asset breaches the key support of $1,550, it can dip to $1,430 and then eventually $1,300, which will trigger liquidations and that will have market-wide ramifications. While Ether is struggling, Bitcoin’s dominance, which is its crypto market share, is approaching a two-year high level.

According to Wolfe Research, Bitcoin’s steadfast position above $25,000 is a positive sign, and called it a “one silver lining,” despite the grim outlook for the crypto market. While the market has been struggling with low volume and thin liquidity, Bitcoin has remained steady, trading between $25,000 and $30,000.

Rob Ginsberg of Wolfe Research further noted that although BTC is up 61% this year, it is still far off its $69k peak and has been underperforming equities for most of the past two years. He then pointed out the pressure from the ongoing Israel-Hamas conflict and the decadal high Treasury yields.

Click here to learn all about investing in Bitcoin (BTC).

A Wider Outlook

The yield on the US 10-Year Treasury rose sharply on Thursday to 4.729% before going down a bit to 4.65%. Meanwhile, US stocks broke their four-day winning streak. After gaining earlier in the week, equities dipped to 4,336 on Thursday, but since then, the market has recovered, with the S&P 500 index currently at 4,349.6. 

The US Dollar Index, which measures the dollar against a basket of foreign currencies — including the euro, British pound, and Swiss franc — is also nearing its highest level in 10 months. The greenback climbing has been adding to the pressure on riskier assets such as equities and crypto. 

The DXY eased on Friday and is currently at 106.379. Gold prices meanwhile jumped, currently at $1,883.135 per ounce, up from about $1,810 last week. Israel-Palestine conflict is offering support to safe-haven gold, which is used as a safe investment during times of political and financial uncertainty. However, higher interest rates raise the opportunity cost of holding the non-yielding precious metal.

This movement in traditional markets came as the consumer price index (CPI) — prices that consumers pay for a wide variety of goods and services — increased by 0.4%, at a slightly faster-than-expected pace in September and 3.7% from a year ago. With CPI being a closely followed inflation gauge, the rise in its figures is keeping inflation in the spotlight for policymakers and raising worries that the US central bank could keep rates higher for some time.

According to a Labor Department report Thursday, excluding volatile food and energy prices, the so-called core CPI increased 0.3% on the month and 4.1% on a 12-month basis. The core numbers also increased 0.3% in August, when it was up 4.3% from the previous 12 months. This shows that the Federal Reserve’s target of 2% inflation is still far off, and it may not be smooth sailing.

This means worker wages fell in real terms, with the Labor Department noting in a separate report that real average hourly earnings dropped 0.2% on the month while on a yearly basis, earnings were up 0.5%. Additionally, initial jobless claims came unchanged from the previous week at 209,000.

Earlier this week, minutes from the Fed’s September meeting showed that the committee opted not to raise interest rates, but the summary showed lingering concern about inflation and worries that upside risks remain. As a result, Treasury yields have jumped, at one point hitting a 16-year high of 4.887%. Multiple Fed officials have said that these increases could negate the need for further policy tightening, and the market is now pricing only a small chance that the Fed hikes before the end of the year.

In regards to the dovish respite, Atlanta Fed Bank President Raphael Bostic and Minneapolis Fed President Neel Kashkari said the central bank may not need to raise rates further. Fed Governor Christopher Waller and Dallas Fed President Lorie Logan argued that rising Treasury yields have done the Fed’s job, preventing any urgent need for another rate hike.

This, obviously, would have consequences for Bitcoin as back in 2019, when the Fed concluded its rate-hiking cycle and entered a seven-month pause, the crypto asset surged by 325%, noted Markus Thielen, head of research and strategy at crypto services provider Matrixport, last week, adding “In line with our outlook, it’s highly likely that the Fed concluded its rate-hiking cycle in July 2023.” However, the eventual decision to cut the rates may have bearish implications initially.

RUNE’s Volatile 2023

While the likes of XDC, MNT, TON, KAS, and SOL dropped 2% to 4% in the past 24 hours, tokens tied to decentralized finance (DeFi) suffered the most among digital asset sectors. Amid continued tepid DeFi activity, the sector’s market cap dropped by 1.1% to $42.5 bln. 

While altcoins have been taking the brunt of the ongoing weakness in the market, Bricks (BRICK), the native token of Reddit’s Fortnite community, rose 110% in 24 hours, with the majority of trading volume occurring on Kraken. However, there has been no clear catalyst for the 800% rise in the volume across the board and the sudden jump in price after having lost over 80% of its value in the past two months.

Another altcoin that saw an increase in its price is the $500 million market cap RUNE. The token jumped more than 16% and is now trading at $1.67 while managing $200.5 mln in 24-hour trading volume, which is up 97% from a day ago.

Despite these gains, RUNE’s price is still down 13% in the past week, though up by about 17% over the past year. The coin’s price has come a long way since its 2023 low at around $0.79 in mid-June. Earlier this month, the coin surpassed $2.15 to hit its yearly high. This has been a pretty volatile year for RUNE. But the token remains 92% off its $20.87 pak.

RUNE is the native token of the decentralized cross-chain liquidity protocol THORChain, which allows users to swap assets between different networks. It was created by a team of developers at the Binance Dexathon in 2018. Over the years, THORChain has suffered several hacks.

The token powers the THORChain network and is used as a pairing token for each asset in the platform’s liquidity pools. It is also used to pay for fees, provide a basis for governance, and secure the THORChain network. In 2019, THORChain announced that it would burn half of the initial maximum supply.

So, RUNE is experiencing all this price action as Thorswap, a DEX that supports multiple blockchains atop the Thorchain network, saw a series of illicitly-linked funds funneled through its platform.

Late in Sept., reports came that all 15,000 ether (ETH) sitting in a wallet associated with the attack on FTX’s wallets last year have been moved through privacy tools and bridges, including the Thorchain router. 

In response, last week, Thorswap announced that it had paused activity and moved to maintenance mode. “A pressing and persistent concern has recently come to light: the potential movement of illicit funds through THORChain and, specifically, THORSwap,” the exchange wrote. “Such activities have no place on the THORSwap platform, and THORSwap stands firmly against any and all criminal actions.”

At the time, the protocol said Thorswap would remain paused until it is able to implement “a more durable and comprehensive solution” to improve security. Finally, this week, the platform came back online.

Taylor Monahan, founder of MyCrypto Wallet and product manager at MetaMask, said she had been raising the alarm about the issue for months. Back in July, she noted that the platform’s “volume bump was solely bc criminals laundered the atomic wallet hack via thorchain.” Monahan further stated that over the past four months, “more than 50% of the ether to Thorswap router to bitcoin transactions have been stolen funds.”

On Oct. 5, ThorChain’s transaction volume reached $355 million, and up until that point, volume on the ThorChain network for the month surpassed $1 billion.

Click here to learn all about investing in THORChain (RUNE). 

THORChain’s Q3 2023 Progress

THORChain’s Q3 2023 ecosystem report sheds light on a significant recent development made by the platform. During this period, it launched its long-awaited lending protocol, which boasts no liquidations, interest, or expiration. This innovation has clearly resonated, as from its Aug. 20 release to Sept. 30, 455 loans were initiated, and over 1 million RUNE were burned.

The report further noted that during these three “massive” months, the platform recorded $2.38b in total volume and collected $3.38 mln in liquidity fees. Meanwhile, BTC-RUNE was the top swap route by volume at $531.3 mln, followed by BTC-ETH at $427 mln.

Additionally, in this year’s third quarter, THORChain introduced Streaming Swaps that allow large swaps to automatically be broken up into multiple-sub swaps executed over time. This feature allows for low fees and better price execution, making THORChain “both faster and cheaper than using a centralized exchange.”

During this period, BNB Smart Chain support was also added to THORChain. Just last month, Metamask, which has over 30 million users across the globe, added support for the protocol.

When it comes to the total value locked (TVL) in its ecosystem, it is currently at $119.56 mln, down from over $223 million late last month. The TVL is still up from $80.3 mln in mid-June but down from $546.4 mln in April 2022, as per DeFi Llama. 

Now, THORChain has memoless transactions and order books on top of its AMM in the pipeline. The team has also started working on perpetual contracts and cold vaults. Moreover, custom refund addresses will be enabled so that refunds can be sent to the specified address, opening up possibilities for smart contracts to make swaps with THORChain without the possibility of loss of funds for the user.

Click here to learn all about buying THORChain (RUNE). 

Concluding Thoughts 

Currently, traders are less confident about the Bitcoin market, which could be due to the multiple postponements of the spot Bitcoin ETF decisions by the US Securities and Exchange Commission (SEC). But if such a product gets approval, as expected by market participants early next year, and with the Bitcoin halving and evolving regulatory landscape, it may create the perfect foundation for the next bull run.

Drawing from historical patterns, when Bitcoin finally gains attention and funds, altcoins often follow suit and rally in succession. However, for now, sentiments lean towards fear, and the price is gradually declining, painting a less optimistic picture for the market in the immediate future.