Whales abandon Cronos [CRO] as derivative traders sell off – Analysis

Earlier this month, Cronos [CRO] experienced a significant surge, skyrocketing by 124.41% amid increased market attention. However, this bullish momentum has taken a sharp turn. In the last 24 hours alone, the cryptocurrency witnessed a notable decline of 12.07%.

With traders focusing on selling and major investors staying relatively inactive, what insights can we gather from the analysis of Cronos Crypto’s recent downturn?

Sell-off Driven by Derivative Traders

It appears that derivative traders have been the primary drivers of Cronos [CRO]’s current price drop, as market signals indicate the potential for further declines.

On November 12th, Cronos [CRO] saw a peak in Open Interest at $23.73 million—the highest level this year. However, this momentum swiftly reversed, with Open Interest plummeting by 13.74% in the past 24 hours to reach $16.21 million.

This rapid decline signaled a shift towards bearish sentiment, with traders increasingly favoring short positions.

The long-to-short ratio, standing at 0.9209, further demonstrates this negative sentiment.

Notably, a ratio below 1 signifies an excess of sell orders over buy orders, suggesting further downward pressure on the price. If this ratio continues to decline, Cronos [CRO] could witness a deeper plunge from its current levels.

The prevailing market trends strongly indicate that bears are dominating, with derivative traders amplifying the selling pressure as sentiment turns increasingly pessimistic.

Increased Liquidation Pressure on CRO

A notable increase in liquidation pressure appears to be adding to the selling momentum on Cronos [CRO], reflecting a profoundly bearish market sentiment.

Recent liquidation data from Coinglass reveals that $108,410 worth of long Cronos [CRO] contracts were forcefully closed, compared to only $7.26 worth of shorts.

This significant disparity underscores a market that has decidedly turned against bullish traders, potentially indicating prolonged downward momentum, with short-term derivative traders likely to benefit.

When examining this liquidation imbalance alongside the long-to-short ratio, the figures are striking—approximately $14,930 worth of long positions were liquidated for every dollar of short positions closed. This imbalance signifies heightened volatility, especially given the heavily bearish sentiment prevailing in the market.

Whale Inactivity and Selling Pressure Trigger Cronos [CRO]’s Decline

In the last 24 hours, whale activity on Cronos [CRO] has notably decreased, with just two significant transactions recorded. This marks the lowest trading volume in the past week, with only 4.80 million CRO exchanged.

As major holders of Cronos [CRO], whales typically influence the asset’s price movements. The drop in their activity, combined with the recent price dip, suggests that many have likely liquidated their positions as market interest wanes.

Simultaneously, spot traders seem to be contributing to the sell-off, evidenced by a 19.38% decrease in active addresses over the last week.

If these patterns persist and the price continues to decline, Cronos [CRO] may face further losses and potentially reach new lows.