Crypto.com’s native token Cronos (CRO) is exhibiting restraint on Nov. 14 in opposition to 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 degree since April 2020 — that’s a 60% worth decline from November’s peak of round $0.178.
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 primarily based on the distinction between the costs within the futures and the spot market. A optimistic funding fee means bullish merchants (lengthy positions) pay bearish merchants (brief positions), representing their confidence a couple of worth rally.
Conversely, a adverse funding fee means brief merchants pay lengthy merchants to maintain their positions open. On Nov. 14, CRO’s funding charges on Huobi and OKX dropped to minus 3%, exhibiting merchants are extraordinarily bearish on the token.
“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 have 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, notably considerations that Crypto.com, a Singapore-based crypto trade, would collapse in the identical method as FTX.
On the core of those worries is potential insolvency, with analysts stating 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 trade’s complete belongings.
4.https://t.co/INIxikfNzy holds $1.6B price 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 price 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 trade have to maneuver massive quantities of crypto earlier than or after they reveal their pockets addresses, it’s a clear 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 trade pockets as an alternative of its chilly storage. Later, the trade did handle to get well the funds, however that additionally raised quite a lot of questions.
Crypto_com CEO is claiming they “by accident” despatched $400 million of their eth to the improper pockets.
He’s both mendacity, or incompetent. https://t.co/hWXvPqBime
— Coffeezilla (@coffeebreak_YT) November 13, 2022
General, Crypto.com noticed its customers withdraw $14 million in ETH and $39 million in different tokens over the weekend, in accordance 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 within the coming weeks.
A set of indicators assist the stated bullish outlook, together with CRO’s weekly relative energy index (RSI), which dropped to just about 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 under.
The opposite bullish indicator contains robust historic assist 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 file.
In different phrases, CRO worth might get well to $0.111, up over 50% from the present worth ranges, as its subsequent upside goal.
Conversely, CRO/USD falling alongside funding charges means that its drop might have been pushed by futures markets, which was additionally the case with Terra’s collapse in Could. Thus, the persistent bearish sentiment throughout the complete 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 mirror the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, it’s best to conduct your individual analysis when making a choice.