Key Takeaways
CRO’s recent weak price performance has been largely driven by massive liquidity outflows from the derivatives market. At the same time, spot investors continue their week-long accumulation, adding $2.49 million worth of the asset to their portfolios.
Cronos [CRO] recorded an underwhelming performance in the past 24 hours, declining by 12%, at press time. This marks a sharp reversal from the impressive 107% rally it posted just a week ago.
Analysis suggests there is now a clear rift between the two key market segments, spot and derivatives, which will likely influence CRO’s price direction in the days ahead.
Liquidity outflow weighs on CRO
CoinGlass Open Interest (OI) data indicates that the recent decline has been driven by notable liquidity outflows from the derivatives market.
As of writing, CRO’s OI dropped by about $20 million, falling to $157 million. A significant outflow usually reflects uncertainty in the market as traders avoid liquidation risks.
Source: CoinGlass
There has also been a parallel decline in derivatives trading volume. Also, the Long-to-Short Ratio stood at 0.9802, showing more selling activity than buying.
Although the drop in Trading Volume remained relatively slight, a continued move downward, further away from the 1.0 level, would point to intense selling pressure in the derivatives market.
Spot investors keep funding CRO
Spot investors, however, have taken a different approach. They continue to increase their exposure to CRO and accumulate more of the asset despite the ongoing sell-offs in derivatives.
In the past 24 hours alone, this group of investors added $4.21 million worth of CRO. This followed an $11.22 million purchase the previous day, the highest single-day accumulation so far.
Source: CoinGlass
At the time of writing, the total amount accumulated by spot investors over the week has reached $24.3 million.
Analysis also shows signs that CRO may be positioned for recovery, as reflected in the Open Interest Weighted Funding Rate.
This indicator provides insight into market sentiment, and with a current positive reading of 0.0006%, it suggests traders are leaning toward the bullish side.
With steady spot accumulation and funding inflows favoring long positions, this trend could begin to reflect in CRO’s price action in the coming days.
Liquidity pathway
The current liquidation pathway shows that CRO’s price could potentially swing in either direction, toward a rally or further decline.
A deeper decline may ultimately benefit the asset, clearing out lower-level liquidity clusters before CRO makes a more sustainable push upward.
This would allow for a stronger and more extended rally as liquidity gaps on the downside are reduced.
Source: CoinGlass
On the other hand, a sharp rally at this stage would leave significant liquidity gaps below.
This scenario implies that even after a strong move higher, CRO could face a steep pullback as the market retraces to fill those levels.
Overall, CRO’s outlook remains tilted to the bullish side. Despite the recent pullback, the combination of spot accumulation and bullish funding data suggests that a strong rally could emerge in the near term.
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