Howdy traders!

The cryptocurrency markets are in a state of a turnaround during early March 2020 as Bitcoin battles to remain above $8,800 as it attempts to climb back toward the $10,000 level. This is helping a lot of altcoins to also stabilize as Ethereum rebounds from $220 and starts to climb itself. 

With the bullish trend still in play, many altcoin holders are continuing to remain excited about where the industry could head toward in 2020. One of the most fascinating things we will experience during the year is the rise of DeFi (Decentralized Finance) as it continues to dominate the forefront of cryptocurrency evangelists.

A relatively new project has plans to help expand this DeFi ecosystem and is making huge waves within the community. I would like to talk about this project in detail today. It is called...Thorchain!

Firstly, let us take a look at the performance of Thorchain below;

As you can see, the performance has been quite spectacular for Thorchain. It only surfaced on exchanges during mid-2019 and it managed to increase by an extraordinary 1400% in 2019 to reach a high of $0.127. In fact, the majority of this price increase was witnessed toward the end of the year as the rocket thrusters started to explode. 

In 2020, the cryptocurrency managed to even climb higher by a total of around 80% to reach an all-time high price of around $0.135. The cryptocurrency has since dropped back beneath $0.1 but it has a host of support beneath to rebound from.

Thorchain is relatively unknown within the cryptocurrency world. It is a DeFi project aimed to allow the facilitation of on-chain swaps without the need for a 3rd party centralized exchange. The project is set to launch its main net during the first half of this year and it will truly take everybody by surprise once it is launched. Furthermore, the team has managed their funding very well and they have a more than adequate budget to push Thorchain in front of the cryptocurrency world through marketing.

For the reasons stated above, and more discussed below, I believe that RUNE has the potential to surge by a further 160% in 2020 to reach my target price of $0.25 at some point during the year. The cryptocurrency will most likely surge past this level and it is a very conservative estimate due to the reason that it will be difficult to provide an accurate prediction once we blast past the current all-time high price and enter into uncharted waters.

In this article, I’ll firstly cover a range of topics that I believe will influence RUNE in reaching my $0.25 target during 2020 and then analyze RUNE on the daily chart to highlight some areas of resistance on the way toward the target.

What Is Thorchain?

Thorchain is a cross-chain digital asset exchange that allows users to swap tokens instantly in a decentralized and permissionless manner. They are focused on interoperability, scalability, and providing liquidity to the entire Decentralised Exchange (DEX) ecosystem that is constantly growing. 

Their main objective is to provide decentralized liquidity for instant swaps between blockchain assets, pretty much like Kyber.

Its token, RUNE, is essential to the entire Thorchain platform as it is required for the facilitation of the token swaps. It is also bonded by validators so they can earn block rewards and is staked in liquidity pools for users to earn liquidity fees. The liquidity pools are known as Continuous Liquidity Pools (CLP) and are designed to ensure that assets are always available for trading. 

You can find out how important liquidity pools are through the following Twitter thread by Andrew Kang;

You can stake RUNE and earn 1% weekly of your balance through RUNEVAULT.

The token swaps are processed through Thorchain bridges which are secured by validators that choose to maintain the bridges to earn from exit fees. It works because the entire network is based on a multi-chain protocol in which parallel chains, representing different tokens and blockchains, are linked through a MerkleChain that stores the roots of the Merkle trees of all the on-chain transactions conducted through the TokenChain. 

Each of these chains is representations of other blockchains such as Bitcoin or Ethereum and a cross-blockchain communication protocol for atomic swaps allows the users to move tokens from these chains onto the Thorchain equivalent TokenChain such as tBitcoin or tEthereum.

To learn more about Thorchain, I recommend going through their Medium blog. This article, in particular, covers their economic model which outlines all the incentives to prevent nodes from stealing funds from the pools. Furthermore, the team has a great documentation section that explains how all this works in Layman’s terms.

BEPSwap

The first product for Thorchain is BEPswap which allows users to swap any BEP token with one another. It is slated as the Binance Chain’s first decentralized finance application to swap BEP2 tokens or stake them to provide liquidity. The product is currently in testnet but is already in the implementation phase as of early March 2020.

The application interface is super clean and extremely easy to use, take a look at it below;

Mainnet Launch Scheduled For Q1

The MainNet will be launched after the ChaosNet is released. The Chaosnet is now going through its final testing (as of early March 2020) and will be launched on Binance Chain with swaps, stakes, and bonding. It will include 12 different nodes (some team nodes) that are actively churned once a day and 6-12 pools enabled for swapping and will end with “Ragnarök” which will see the shutdown of ChaosNet to pave the way for the MainNet.

Once the MainNet launches, it will be built for Ethereum and Bitcoin support, however, they will not be available as it launches. It will be fully decentralized with zero team nodes and no limits on the amount of RUNE that can be staked. 

Data from Santiment shows that the team are constantly working on developing and improving their protocol as we head close to the MainNet release;

There are some Twitter users with a strong following that are extremely excited about the future of Thor;

Sitting On A Pile Of Cash

Lastly, it is good to know that the team is sitting on around $9 million in funding according to their latest treasury reports. The great thing about the report is the fact that they have over $3.8 million reserved for the community. It has been stated that over $300K of this budget is allocated specifically for marketing which will certainly help to get the word out about Thorchain!

Thorchain (RUNE) Price Analysis

LONG TERM - DAILY CHART

What Has Been Going On?

Taking a look at the daily chart above, we can clearly see the exceptional price-performance during 2019 as the cryptocurrency reached a high of $0.112 during December 2019. It had climbed from a low price beneath $0.02 as it launched itself into this resistance. The resistance was provided by a 1.414 Fibonacci Extension level and it caused RUNE to roll over and drop for the remained of 2019.

Throughout the price decline, Thorchain managed to find very strong support at $0.054 which was provided by a .618 Fibonacci Retracement level. It rebounded after reaching this level of support and is still yet to return anywhere near this level.

During 2020, we can see that Thorchain continued to climb even further higher as it slowly ground its way back toward the aforementioned $0.112 resistance. It popped up above this level during the last few days of January 2020 as it climbed higher to reach the resistance at $0.135, provided by the 1.618 Fibonacci Extension level.

The cryptocurrency has since declined slightly but has found support at the 100-days EMA level at around $0.095. It is also supported by the short term .5 Fibonacci Retracement level.

Are We Bullish Or Bearish (as of March 2020)?

As of March 2020, we can be considered as neutral. The cryptocurrency would need to climb and create a fresh all time high above $0.135 before we can consider it to be bullish again. On the other hand, if RUNE was to drop and fall beneath the support at $0.054, we could consider the market to be bearish.

Toward the downside, the first level of support is located at $0.092 which is provided by the short term .5 Fibonacci Retracement level. Beneath this, additional support lies at $0.09, $0.0825 (short term .618 Fib Retracement), and $0.08.

If the selling pressure continues to drive RUNE beneath support at $0.08, additional support lies at $0.068 (short term .786 Fib Retracement), $0.059 (short term .886 Fib Retracement), and then at the previous longterm .618 Fib Retracement (drawn in green) priced at $0.054. 

Theoretically, we should not see RUNE dropping beneath here, however, if it does, support can be found at $0.04, $0.034 (.786 Fib Retracement), and $0.022 (.886 Fib Retracement).

Where Is The Resistance On The Way Up TO $0.25?

On the other hand, if the bulls can hold the current support and start to rebound higher, the first level of resistance to climb above is located at $0.1. This is then followed by resistance at $0.119 (previous 1.414 Fib Extension) and $0.135 (previous 1.618 Fib Extension and all time high). 

Once the ATH is broken, higher resistance is then expected at $0.14, $0.15, and $0.155 which is resistance provided by a 1.272 Fibonacci Extension level. This is then followed up by resistance at $0.166 (1.414 Fib Extension) and $0.182 (1.618 Fib Extension).

The next level of resistance is then expected at $0.20. If the buyers can break $0.20, resistance is located at $0.202 (long term 1.272 Fib Extension) and $0.219 (1.414 Fib Extension). It is important for me to highlight that these Fibonacci Extension levels are drawn in the traditional way (from swing low to swing high to retracement leg). The last level of resistance to highlight lies at $0.244 (1.618 Fib Extension level). 

If the bulls can break above here, they will be clear to make an attempt at my $0.25 price prediction level. Resistance above here is impossible to chart and we would need to wait for a break of $0.135 to be able to find higher resistance past the previous ATH.

Conclusion

Thorchain will certainly cause a buzz during 2020. Especially once they launch the mainnet and people start to realize what it can offer to the ever-growing DeFi world. The fact that it is a completely decentralized and permissionless method of trading will certainly attract a lot of traders especially with the constant liquidity pools that the project is built to provide.