In the past week, a large number of altcoins have broken out of their sideways reach to make double-digit gains and it seems investors are interpreting the current trend as a new ‘altcoin season’.
As historical data shows, these altcoin eruptions usually occur after Bitcoin (BTC) enters a consolidation phase following a sharp rally similar to the one the maket has seen in the past three weeks.
For many of the recent top risers, technical analysis traders are simply taking advantage of tokens that show a bullish market structure or are about to break out due to larger volumes, but there are also coins that are moving higher based on some fundamental factors. .
THORChain (RUNE) is one of the tokens powered by over investor FOMO and the digital asset was also one of the best moving altcoins in 2020.
Strong fundamentals support RUNE’s performance
The THORChain project was founded in 2018 and aimed to build an independent blockchain that could facilitate cross-chain transfers. The project currently focuses exclusively on Binance Chain BEP2 tokens, which somewhat contradicts its chain agnostic ambitions, but there is the possibility that additional chains could be added in the future.
Currently, THORChain’s native RUNE token is being given to traders providing the platform with liquidity and holders can also take advantage of the stake pool. The liquidity pools are promoted and managed in the same way as Uniswap, although they are 50% RUNE tokens.
In the past two weeks, the RUNE token has risen 95% and while no timeline has been set for the mainnet launch, it is expected to be based on the Cosmos blockchain.
Since August 2020, the BEPSwap DEX has been running in beta, and the team regularly releases detailed weekly reports on how the development of the THORchain ecosystem is progressing.
On December 1, THORchain’s official Twitter account announced this The integration of the Bitcoin chain has been completed and tested successfully. The team also hinted that cross-chain integration with Ethereum would be the next goal of the project.
Another recent positive development came on December 31 when Haven Protocol tweeted that their integration with THORchain would be completed in three months. The post also stated that a strike would be possible by adding HXV and xUSD to Haven Protocol’s liquidity pools.
There are a few hurdles ahead
In the past week, THORChain hit a new milestone as the platform processed 10 million transactions in 3 months, but a number of analysts have severely criticized the project for the relatively small number of nodes.
According to data from Delphi Digital, there are currently 67 nodes and these are mainly operated by AWS or Digital Ocean. This problem can be partially explained by the large amount of RUNE that must be plotted to become a validator.
Data from TheTie also shows that price spikes were accompanied by increases and decreases in social network activity. This effect is consistent with announcements of development activities and partnerships, as that news is usually shared and positively commented on by the growing community.
Currently, the project is highly regarded by the community and altcoin investors, but its future success may depend on the team’s ability to deliver on its promises.
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