What is happening here is that the market knows there are 170...

What is happening here is that the market knows there are 170 million shares that are shortly to become tradable. The market is moving to minimise the arbitrage on these shares, the mechanism is as follows:

1) Current holders anticipate that 2.9c shares will be sold at arbitrage as long as there is a profit to be made, i.e. down to 2.9c
2) If you are a holder in profit and thus anticipate (1), you can get that arbitrage for yourself before the CR shares become tradable. So you sell, with the anticipation that you will be able to buy back cheaper at some later date, after the arbitrage has been exhausted down to 2.9c
3) Enough holders do this, the price reaches 2.9c before the CR shares become tradable.

It doesn't really matter what the intention of the CR holders have, the market anticipates they will sell, and that is enough.