A large number of altcoins took off from the sidelines last week to deliver double-digit gains, and it looks like investors are interpreting the current trend as a new “all-season”.
As historical data show, these alternative currency surges usually occur after Bitcoin (BTC) entered its consolidation phase after the same surge that the company has experienced in the past three weeks.
For many of the big driving forces lately, technical analysis traders are simply using tokens that are showing a bullish market structure or are about to be destroyed due to increased volumes, but there are also coins moving up based on a number of underlying factors.
THORChain (RUNE) is one of the tokens that FOMO controls the most, and the digital asset was also one of the best digital currencies in 2020.
Strong foundations support RUNE performance
The THORChain project was founded in 2018 and aims to create an independent blockchain that could facilitate the transfer of chains. The project currently focuses exclusively on the Binance BEP2 chain tokens, which is somewhat at odds with their non-chain ambitions, but there is a possibility that other chains could be added in the future.
The initial RUNE THORChain token is currently issued to traders who provide liquidity to the platform, and shareholders can also benefit from the betting group. Liquidity pools are incentivized and managed in the same way as Uniswap, even though they are 50% RUNE tokens.
RUNE / USDT price chart. Source: TradingView
The RUNE token has increased by 95% in the past two weeks, and while there is no specific mainnet launch date, it is expected to be based on the Cosmos blockchain.
BEPSwap DEX has been in beta since August 2020, and the team regularly provides detailed weekly reports on how the THORchain ecosystem has evolved.
On December 1st, THORchain’s official Twitter account announced that the integration of bitcoins across the chain was complete and successfully tested. The team also suggested that the next goal of the project would be cross-chain integration with Ethereum.
Another positive development came on December 31st when the Haven Protocol tweeted that their integration with THORchain would be completed within three months. The post also mentioned that the effort would be possible by adding HXV and xUSD to liquidity pools in the Haven protocol.
We have obstacles
THORChain entered a new phase last week when the platform processed 10 million transactions in 3 months, but a number of analysts sharply criticized the project due to the relatively small number of nodes.
According to Delphi Digital, there are currently 67 nodes that are primarily served by AWS or Digital Ocean. This problem can be partially explained by the large amount of RUNE it takes to become a controller.
RUN Twitter user activity versus US dollars. Source: TheTie
TheTie’s data also shows that inflation has been accompanied by increases and decreases in social media activity. This effect is consistent with development and partnership announcements as the news tends to be shared and positively commented on by the growing community.
The project is currently highly respected among the public and cryptocurrency investors, but future success may depend on the team’s ability to deliver on their promises.