THORChain (RUNE) rose and closed above the overhead resistance at $5 on September 26, indicating the start of a new rally.

RUNE/USDT Daily Chart | Source: TradingView

The upward sloping moving averages and the RSI near the overbought zone indicate that buyers are in control. A slight decline to the breakout level of $5 cannot be ruled out. If the price rebounds from $5 with strength, the bullish outlook above $6 will improve. After that, the RUNE/USDT pair may rise to $7.

If the bears want to stall the gains, they will have to pull the price below the 20-day EMA ($4.66). Such a move would suggest that the breakout might be a bull trap. The pair could then slide to the 50-day SMA ($4.11).

RUNE/USDT 4-hour chart | Source: TradingView

The pair has fallen back to the 20-day EMA on the 4-hour chart. If this support level is broken, the correction could reach the breakout level of $5. Buyers are expected to defend the $5 support level strongly.

On the other hand, if the price declines and breaks below $5, it would indicate that the bulls are quickly booking profits. That could start a deep correction towards the next important support level at $4.40.

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