Cronos price has been in a relentless bull run this week as it jumped to it highest level since April 2022. CRO has now soared by 365% from its lowest level this year, pushing its market capitalization to over $12 billion. This article explains the top reason why the CRO price may crash soon.
Cronos Price May Crash as the Trump Media Hype Cools
The main reason why the CRO price surged is that Trump Media announced a deal to launch a strategic CRO fund with Crypto.com. The new fund, which will be publicly traded, will start with over $6 billion, most of which will be used to buy CRO token.
This is a major positive news for the price of Cronos as it will lead to more demand for the token. With Trump being the president, it also raises the possibility that the SEC will approve the Canary Capital CRO ETF.
However, historically, such big moves in crypto tends to be short-lived as investors start to take profits. For example, the OKB price has lost its recent momentum and crashed by over 30% from the all-time high.
CRO price may also plunge as this hype fades and as investors wait for another catalyst.
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Technical Analysis Concepts Points to a CRO Price Crash
The other main reason why the CRO price may crash soon is its technicals. First, the ongoing surge is part of the markup phase of the Wyckoff Theory, which is then followed by the distribution or markdown phase. Markdown occurs when FOMO ends and panic selling begins.
Second, the token could have a break-and-retest pattern. This occurs when an asset surges above a crucial resistance level and then retests it, indicating a potential continuation. In CRO’s case, it may plunge and retest the support at $0.2286, its highest point in December last year, which is ~25% below the current level.
Third, the Cronos price may plunge due to mean reversion, which occurs after an asset deviates significantly from its moving averages. In its case, it remains much higher than the 50-day and 100-day moving averages, meaning that it may pull back to align with them.
Finally, the token may plunge because it has become highly overbought. The Relative Strength Index (RSI) has moved to 88, while the Commodity Channel Index jumped to 400. It also moved to the extreme overshoot level of the Murrey Math Lines. In most cases, a highly overbought asset tends to pull back.
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