Cronos price went parabolic this week after Trump Media and Crypto.com announced the launch of a company to accumulate CRO tokens. Summary Cronos price surged after the launch of Trump Media CRO Strategy company. It has become highly overbought, pointing to an eventual crash in the near term. The coin’s funding rate has turned negative, a sign that traders expect the price to drop. Cronos (CRO) jumped to a high of $0.2872, its highest point since May 2022, up by 270% from its lowest level this year. Its 24-hour volume neared $1 billion, while its market cap hit $9 billion. The Trump Media CRO Strategy will have assets like $1 billion in CRO tokens, $200 million in cash, a $5 billion credit line, and $220 million in mandatory exercise warrants. While this is good news for the CRO price, there are a few reasons why it is due for a reversal. Cronos price will crash as the CRO news fades Crypto and stock prices always surge after a major announcement as investors buy, and the Fear of Missing Out prevails. Historically, these jumps tend to be short-lived. A good example of this is the OKB price, which surged after the recent token burn news. With the news behind us, OKB token has now plunged by 35% from its highest level this month. Similarly, Bio Protocol price, which went parabolic last week, has now plunged by 45% from its highest point. The CRO price will have a similar performance once the excitement cools. You might also like: Dogecoin price warning: bearish setup emerges, derivatives decline CRO price has become highly overbought Technicals suggest that the Cronos price could plunge in the coming days. First, top oscillators like the Relative Strength Index and the Money Flow Index have all moved to the overbought zone. A highly overbought asset tends to decline as some holders sell. CRO price has moved much higher than its moving averages. It is 90% above the 50-day EMA and 116% above the 100-day EMA. As such, the token will likely have a mean reversion, where an asset drops to move closer to the moving averages. CRO price chart | Source: crypto.news Falling funding rate The derivatives market also points to further Cronos price declines. One of the top metrics in the market is the funding rate. A funding rate is a small fee or rebate that bulls and bears pay to maintain positions in perpetual futures. A negative funding rate is a sign that investors anticipate that the future price will be lower than the current one. CRO funding rate | Source: CoinGlass Also, the futures open interest jumped to a multi-year high of $53 million. While a rising open interest is a good thing, in most cases, reversals start when it reaches extreme levels. You might also like: Why is the crypto market going up today? (Aug. 27)