On the 16th of July, Crypto.com announced the strategic investment worth $400 million from Citadel Securities, which has valued them at $200 billion. It marked the exchange’s first institutional funding round in their decade-long history, the post read.
Cronos [CRO] reacted bullishly to the news on the day. From the day’s open at $0.0555, the token rallied 21.92% to a local high of $0.0677. The trading volume for the day had jumped by 12x the previous day’s volume.
In the following 12 hours, the exchange token saw a 15.9% retracement, falling to $0.057. Here’s how the CRO price trends could go in the coming weeks.
Is Cronos still in a strong uptrend?
Source: CRO/USD on TradingView
The Directional Movement Index, used to measure the relative strengths of price trends, had both its ADX (yellow) and +DI (green) well above the 20 threshold, signaling an intense uptrend in progress.
However, the OBV disagreed. It was yet to challenge the highs the volume indicator made in May, showing that buying pressure was relatively weak.
The price action leads, indicators follow, and the OBV was on to something actionable for investors. Using the bearish impulse move from $0.083 down to $0.053, a set of Fibonacci retracement levels (orange) was plotted.
At the time of writing, CRO has not even challenged the 50% level of this move. Hence, there is a chance the current move could continue $0.072-$0.077. The lower timeframe price data can be used to settle this point.
Should Cronos traders sell?
Source: CRO/USD on TradingView
The 4-hour chart showed both a bearish structure and an obstinate supply zone. This band of resistance was around $0.062-$0.063. Since the time it became a supply zone in June, it has been tested four times.
The fourth time, a couple of days ago, has not succeeded yet. The bullish investment news from Citadel has been a sell-the-news type reaction.
Source: CoinGlass
Another point supporting the bearish idea is based on the liquidation heatmap. The cluster of short liquidations around $0.060-$0.065 was swept by the recent price spike.
Such a sweep into a key resistance zone is usually followed by a reversal. Hence, in the coming days, a price drop toward $0.05 is likely.
Final Summary
- The Citadel Securities investment of $400 million was the first institutional funding round for Crypto.com in its history.
- The technical indicators showed upward momentum, but the longer-term price action exhibited a bearish structure.
