CRO price came under intense pressure on Thursday as cryptocurrencies recoiled. Cronos dropped to a low of $0.056, where it has been in the past few days. It has plunged by more than 95% from its all-time high. This decline has seen its total market cap plunge to about $1.45 billion.
Cronos ecosystem activity slips
Cronos is the blockchain network for Crypto.com, the giant crypto exchange. Unlike FTX Token, CRO has real utility in that it is used to power a relatively sizable ecosystem. Its ecosystem is made up of projects like decentralized finance (DeFi), non-fungible tokens (NFT), and the metaverse.
CRO price has dropped as investors worry about the safety of Crypto.com, one of the biggest spenders in the industry. Crypto has spent more than a billion dollars in the past few months to grow its market share. For example, it spends $700 million to acquire rights of Staples Center.
The company is also a major sponsor of major sports events like the recent World Cup, Formula 1, and UFC. It also spent millions of dollars in a Superbowl ad and additional funds in television advertising. As such, the concern is where the company got the funds since it is a mid-cap exchange.
CRO price has also dropped because of the challenges facing its ecosystem. Data shows that the total value locked (TVL) in its DeFi ecosystem plunged to $540 million. At its peak, the network had a TVL of over $4 billion.
Most networks in its ecosystem have seen significant outflows. For example, Tectonic’s TVL has dropped by more than 4% in the past 30 days to $282 million while VVS Finance has lost its TVL to over $178 million.
Will CRO price recover?
So, will Cronos price bounce back? For this to happen, the network needs to have more activity in its network. Also, the broad crypto industry needs to be supportive. Unfortunately, conditions are relatively difficult as interest rates surge.
Therefore, there is a likelihood that Cronos will continue falling in the coming months. A likely solution will be for Crypto.com to publish its full audited finances. If this happens, it will likely bring more confidence in the network.
As shown below, CRO price remains below all moving averages while the bearish momentum is continuing. Therefore, the next key support level to watch will be at $0.050.
