Cryptocurrency analytics firm Santiment has warned that certain metrics suggest Crypto.-com coin ($CRO) may be overbought after surging over 1,440% year-to-date, partly thanks to the launch of a new Ethereum Virtual Machine (EVM) compatible blockchain and to an iconic deal.
The price of $CRO, the native token of the Crypto..com chain that was created to “build a network of cryptocurrency projects, and develop merchants’ ability to accept crypto as a form of payment,” has exploded this year after Crypto.com announced that one of the most iconic sports arenas in America, Staples Center, would be renamed to “Crypto.com Arena” as a result of a new sponsorship deal estimated to be worth around $700 million.
The cryptocurrency’s price may have also been surging thanks to the launch of Cronos, an EVM-compatible network set to run alongside the Crypto.com chain that aims to scale the DeFi and dApp ecosystem by “providing developers with the ability to instantly port apps from Ethereum and EVM-compatible chains.”
Cronos is set to be the first Cosmos EVM chain built for DeFi, non-fungible tokens (NFTs), and the Metaverse. The native token of the Cronos blockchain is $CRO.
Santiment has warned in a new blog post that $CRO, which is now close to trading at $1 per token, has seen a spike in investors driven by fear of missing out (FOMO) from social media, which could be a bearish indicator for the cryptocurrency.
The firm wrote that the FOMO is “real as seen from the massive spikes in social volume over this month as compared to the previous months.” The cryptocurrency topped its “Social Trends” ranking more than once, which historically Santiment says means it’s “highly likely that the local top is in.”
The firm also looked at $CRO’s MVRV 7-day metric, which is calculated by diving its market value by its realized value. It found the token is currently in a “danger zone” because short-term holders who have recently invested may be looking to take profits.
According to the firm, the price of $CRO will likely drop before it starts surging again in the future as social and on-chain metrics show “quite a number of people FOMO’d in and will likely act as sell pressure if things go south.”
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
Featured image via Unsplash