CRO rallies 40% as Cronos proposes launch of a strategic reserve

CRO crypto broke out of its 3-month downtrend after Cronos launched a proposal aimed at establishing a Cronos Strategic Reserve.

According to a March 3 X post, Cronos, the Layer 1 blockchain associated with crypto exchange Crypto.com, is considering a proposal to establish a Cronos Strategic Reserve wallet that will be made by reissuing the 70 billion CRO tokens that were burned in 2021.

The burning event hailed as one of the largest in crypto history, reduced the supply from 100 billion to 30 billion CRO tokens to support decentralization efforts ahead of Cronos’ mainnet launch.

Through the Cronos reserve, which will be subject to a new 5-year vesting period, the project will fund its roadmap, which includes plans to pursue a spot ETF launch by the end of 2025. 

While voting for the proposal will end on March 17, it has already garnered over 99.76% of votes favouring the move that would restore the total token supply to its original 100 billion CRO.

Cronos (CRO) rallied to an intraday high of $0.101 today, marking a 46% surge from its weekly low, while its market cap was seated at $2.5 billion as of press time. Its daily trading volume also skyrocketed 773% over the period to over $164 million.

Another key reason for the hype around the token was Cronos’ announcement that the Cronos Strategic Reserve would support “America’s ambition to become the World Capital of Crypto.” 

The statement likely caught traders’ attention, especially as the overall crypto market was already surging, fueled by U.S. President Donald Trump’s recent announcement of a strategic crypto reserve for the nation, which would include a basket of cryptocurrencies like Bitcoin and Ethereum.

However, the proposal has also sparked criticism from several community members on X, who believe the increased supply could lead to a price dilution.

CRO price analysis

Technical indicators suggest a bearish outlook for CRO in the short term.

On the 1-day CRO/USDT price chart, CRO has broken up above the descending trendline that has been formed since Dec. 17 after it formed a head and shoulders pattern, leading to a bearish momentum. 

Despite this, the 200-day moving average remains above the 50-day MA, signalling that recent price action has been weak and that bearish pressure is still strong, with buyers showing little interest.

Meanwhile, the Supertrend Indicator is in the red, and the Relative Strength Index sits at a neutral 42, putting CRO in a tough position. These indicators suggest that momentum is not strong enough to reverse the prevailing bearish trend.

At press time, CRO was exchanging hands at $0.084 per coin, while its social sentiment was positive per Santiment data.

However, the price action could switch back to its bearish trend in the coming days if the current hype fades.