Cronos Negative Funding Rates Surge As Profit-Taking Wave Intensifies
Key Insights:
- A spike in negative funding rates signals profit-taking after Cronos price soars 150%.
- Spot outflows surge, steering the market into a retracement.
- Here’s why CRO could be headed north of $1 as attention shifts towards Cronos.
It’s been an interesting week for Cronos price action, whose price surged by as much as 150% in the last 3 days. The cryptocurrency found favor with the bulls courtesy of a recently announced major development.
The CRO price rally kicked off after Trump Media Group announced a $6.4 billion fund to build a Cronos treasury. The announcement triggered a massive speculative event and an influx of liquidity into the CRO coin.
As a result, CRO price rallied and became the weekly gainer among the top coins. Its price surged as high as $0.38 in the last 24 hours, retesting levels last observed in early May 2022.
Interestingly, the extremely overbought nature of the rally saw the rise of bearish expectations as evidenced by the spike in negative funding rates. CoinGlass data showed that weighted funding rates surged as high as -0.064, which was the highest since 8 July.
The bearish expectations resulted in a surge in liquidations by over $6 million in the last 24 hours. However, the weight of sell pressure due to profit-taking also resulted in a spike in long liquidations by about $5 million during the same session.
Massive Spike Outflows Confirm Cronos Profit-Taking
Spot flow data disclosed that Cronos experienced more than $8 million worth of spot outflows in the last 24 hours. This marked the single largest daily spot outflows observed in more than 12 months.
This profit-taking triggered a pullback to around $0.30 at the time of observation. It was worth noting that this latest excitement in price action was accompanied by strong activity in the derivatives segment.
CRO open interest surged above $130 million, which was comparatively low compared to some top coins. However, it was still an impressive jump considering that it was less than $50 million at its lowest point in August.
This open interest spike was a reflection of the newfound excitement around Cronos. The underlying reason behind the rally also underscored more potential ahead.
This was actually not CRO’s first rodeo as far as explosive price performances were concerned. The same cryptocurrency rallied by over 1,000% from its lowest to highest price point in 2021. This latest price move echoed the early days of the 2021 rally.
Trump Media Group (TMG) has been at the forefront of driving adoption and advancements in the blockchain segment. TMG revealed plans to make Cronos a foundation for America’s transition to a digital WEB3 economy.
The announcement elevated Cronos blockchain’s importance in the transition and thus the latest wave of excitement around the CRO coin. The fact that TMG revealed plans to set up a CRO treasury paved the way for robust demand for the cryptocurrency.
The aforementioned developments also improved CRO’s outlook. The cryptocurrency’s performance in the 2021 bull run saw it rally as high as $0.95. The prospects of surpassing the $1 milestone were much higher this time, especially now that there is a major institutional-grade catalyst.
A $1 price tag for the CRO cryptocurrency was about a 213% rally away from its current price point. The spotlight shift in favor of Cronos ensured that CRO joined the list of coins likely to receive more liquidity flows in the coming months.
In the meantime, it will be interesting to see how development within the Cronos network will influence growth within the network. These latest developments had a net-positive impact on stablecoin liquidity and total value within the Cronos ecosystem.
Cronos TVL pushed to $575 million to $797 million while stablecoin marketcap jumped from $167 million to $182 million this week.
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