Crypto.com’s native token Cronos (CRO) is displaying restraint on Nov. 14 towards mounting sell-pressure constructing within the wake of the FTX’s dramatic collapse final week. Now, the CRO/USD pair is eyeing a watershed worth restoration.
On Nov. 14, CRO’s worth wobbled between earnings and losses, buying and selling round $0.069 a day after crashing to $0.05, its lowest stage since April 2020 — that’s a 60% worth decline from November’s peak of round $0.178.
CRO/USD weekly worth chart. Supply: TradingView
CRO funding fee drops to -3%
The interval of CRO’s worth decline occurred alongside a pointy drop within the token’s perpetual futures funding charges.
Funding charges are recurring funds made by merchants based mostly on the distinction between the costs within the futures and the spot market. A constructive funding fee means bullish merchants (lengthy positions) pay bearish merchants (quick positions), representing their confidence a few worth rally.
Conversely, a unfavourable funding fee means quick merchants pay lengthy merchants to maintain their positions open. On Nov. 14, CRO’s funding charges on Huobi and OKX dropped to minus 3%, displaying merchants are extraordinarily bearish on the token.
CRO funding charges historical past. Supply: Coinglass.com
“That is actually the very same dynamic that occurred earlier than Celsius and FTX collapsed,” warned Dylan LeClair, senior analyst at digital asset fund UTXO Administration on Nov. 13, when CRO funding charges had been close to minus 2%.
FTX contagion fears unfold to Crypto.com
The CRO sell-off began from fears of contagion amid the FTX fiasco, significantly considerations that Crypto.com, a Singapore-based crypto alternate, would collapse in the identical method as FTX.
On the core of those worries is potential insolvency, with analysts mentioning that Crypto.com is holding low-liquid cryptocurrencies like Shiba Inu (SHIB) and its personal token CRO as reserves, which reportedly make up 40% of the alternate’s complete belongings.
4.https://t.co/INIxikfNzy holds $1.6B value of BTC/ETH/USDT/USDC/DAI/BUSD belongings, accounting for 60%.
40% of belongings are low liquidity belongings.
— Lookonchain (@lookonchain) November 13, 2022
As well as, Crypto.com additionally moved $210 million value of stablecoins from Binance and Circle earlier than demonstrating its reserves to the general public. Binance CEO Changpeng Zhao confirmed the transfer, urging warning, the day earlier than CRO dropped to its April 2020 low.
If an alternate need to transfer giant quantities of crypto earlier than or after they exhibit their pockets addresses, it’s a transparent signal of issues. Keep away. Keep #SAFU.
— CZ Binance (@cz_binance) November 13, 2022
What’s extra, Crypto.com additionally misconducted a $400 million Ether (ETH) transaction, sending it to a Gate.io alternate pockets as an alternative of its chilly storage. Later, the alternate did handle to recuperate the funds, however that additionally raised a whole lot of questions.
Crypto_com CEO is claiming they “by chance” despatched $400 million of their eth to the incorrect pockets.
He’s both mendacity, or incompetent. https://t.co/hWXvPqBime
— Coffeezilla (@coffeebreak_YT) November 13, 2022
Total, Crypto.com noticed its customers withdraw $14 million in ETH and $39 million in different tokens over the weekend, in response to information tracked by Argus Inc.
50% Cronos worth reduction rally forward?
Strictly from a technical perspective, nevertheless, CRO’s worth might nonetheless see a possible reduction rally in the approaching weeks.
A set of indicators help the mentioned bullish outlook, together with CRO’s weekly relative energy index (RSI), which dropped to almost 30, or almost “oversold” territory. An analogous drop in June earlier this 12 months had preceded a 75% restoration rally from $0.099 to $0.162, as proven beneath.
CRO/USD weekly worth chart. Supply: TradingView
The opposite bullish indicator contains robust historic help of $0.061. As well as, CRO’s present worth vary of $0.061 and $0.111 has the token’s highest quantity profile seen vary (VPVR) on document.
In different phrases, CRO worth might recuperate to $0.111, up over 50% from the present worth ranges, as its subsequent upside goal.
Associated: Trade outflows hit historic highs as Bitcoin buyers self-custody
Conversely, CRO/USD falling alongside funding charges means that its drop can have been pushed by futures markets, which was additionally the case with Terra’s collapse in Could. Thus, the persistent bearish sentiment throughout your entire cryptocurrency market might dampen CRO’s restoration prospects.
The views and opinions expressed listed below are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer entails danger, you must conduct your individual analysis when making a call.