Why is Cronos (CRO) rallying?

• Cronos is extending its gains on Thursday after rallying nearly 8% the previous day.
• Cronos invites its community to vote for its ambitious proposal to establish a Cronos ETF and Cronos Strategic Reserve.
• Santiment data shows that certain whales are accumulating CRO tokens.

Cronos (CRO) price extends its gains by 7%, trading around $0.086 on Thursday after rallying nearly 8% the previous day. Cronos invites its community to vote for its ambitious proposal to establish Cronos ETF and Cronos Strategic Reserve. Moreover, Santiment data shows that certain whales accumulated CRO tokens during the recent price dip.

Cronos ETF and Cronos Strategic Reserve

Cronos announced voting on the Cronos POS governance forum for its proposal on Monday. 

“The community is invited to vote on a bold plan to restore Cronos’ Golden Age, with a massive investment allocated to support Cronos Roadmap (incl. its ETF) and America’s ambition to become the World Capital of crypto,” said Cronos on its X post.

Cronos continued, “To support this goal, the Cronos Strategic Reserve will be established via a reversal of the February 2021 token burn. The Strategic Reserve will be subject to a new 5-year lockup on top of the 5-year lockup that has already passed since CRO’s original issuance on Ethereum, bringing the total vesting period to 10 years.”

In 2021, 70 billion CRO were burnt in one of history’s most significant burn transactions. 

“Under today’s proposal, an equal number of tokens will be re-issued on Cronos POS into a Cronos Strategic Reserve escrow wallet, bringing the total supply back to the initial supply of 100 billion CRO. The Cronos Strategic Reserve escrow wallet will operate under strict control mechanisms,” said CRO in its blog post.

Cronos price action favor bulls as it breaks above the descending trendline

Cronos price retested and found support around its weekly level at $0.085 on Tuesday and rallied 7.75% the next day, breaking above its descending trendline. At the time of writing on Thursday, it continues to trade higher by 7%, around $0.086.

If CRO continues its upward momentum, it could extend the rally by 27% from its current levels to retest its weekly resistance at $0.108.

The Relative Strength Index (RSI) reads 49, pointing upward towards its neutral level of 50, indicating mild bullish momentum. Moreover, the Moving Average Convergence Divergence (MACD) indicator also showed a bullish crossover on Sunday, suggesting an upward trend.

CRO/USDT daily chart

Santiment’s Supply Distribution metric shows that the whale wallets holding CRO tokens between 100,000 to 1 million and 10 million to 100 million have increased from February 25 to Thursday. Meanwhile, 1 million to 10 million wallets have decreased during the same period, with an overall net accumulation of 800 million CRO tokens.

This development shows that the second cohort of whales could have fallen prey to the capitulation event. In contrast, the first set of wallets seized the opportunity and accumulated CRO at a discount during the recent price dip, bolstering investors’ confidence in Cronos.

CRO Supply distribution chart. Source: Santiment

However, the bullish thesis would be invalidated if CRO closes below its weekly support at $0.085; it would extend the decline to retest its next support level at $0.067.