FTX collapse is Trust Wallet Token’s gain — Why did TWT price soar 150% in six days?
2022.11.15 10:31
FTX collapse is Trust Wallet Token’s gain — Why did TWT price soar 150% in six days?
Budrigannews.com – Trust Wallet Token (TWT) has surged by nearly 150% in the last six days, bucking the downturn in the cryptocurrency market, whose net capitalization has crashed by almost $100 billion in the same period.
TWT whale accumulation picks up momentum
TWT’s price reached an intraday high of $2.43 on Nov. 15, a day after establishing a record high at nearly $2.75. At its lowest in 2022, the token was changing hands for $0.40, which makes it one of the year’s best-performing assets, with over 225% year-to-date gains.
TWT/USD weekly price chart. Source: TradingView
The Trust Wallet Token’s uptrend picked up momentum in November following the collapse of Sam Bankman-Fried’s FTX, prompting a bank run situation wherein traders withdrew their funds from exchanges en masse.
For instance, the total number of Bitcoin (BTC) in FTX’s wallets dropped to zero in the week ending Nov. 13. Similarly, the exchange’s Ether (ETH) reserves fell from 611,000 to just 2,800 in the same period.
Ethereum balance on FTX. Source: Glassnode
Distrust in centralized exchanges seems to have boosted the appetite for self-custody wallets. Binance CEO Changpeng Zhao’s endorsement of the token’s parent platform, Trust Wallet, has also played a major part in driving up the TWT price.
.@TrustWallet your keys, your coins. https://t.co/pJUc26kQ7n
— CZ Binance (@cz_binance) November 13, 2022
Furthermore, the Trust Wallet Token supply rate held by addresses with a balance between 1,000 TWT and 10 million TWT tokens surged during the six-day price uptrend, suggesting whale accumulation.
Trust Wallet Token supply distribution among wallets holding 1K-10M TWT. Source: Santiment
Meanwhile, the token’s trading volume has soared from 279 million TWT to 593.25 TWT in the same period, showcasing market’s conviction in its uptrend.
Trust Wallet Token daily trading volume (in TWT). Source: Santiment
TWT serves as a utility token for Trust Wallet, wherein traders can buy, sell and collect nonfungible tokens (NFTs), as well as exchange and stake cryptocurrencies. As a result, TWT typically operates as a centralized exchange token, while Trust Wallet enables users to control their own funds.
Thus, it’s likely that Trust Wallet emerged as an off-ramp for traders pulling their funds from cryptocurrency exchanges in the wake of the FTX fiasco, with TWT price rallying in response.
‘Not your keys, not your #crypto’ has been resonating around the Twitter space over these past few days.
While many people utilise centralised exchanges, a lot of users are yet to harness the power of self custody.
Start taking control, today https://t.co/h3pVVNzgpL
— Trust – Crypto Wallet (@TrustWallet) November 11, 2022
Trust Wallet Token’s “overbought” risks
From a technical perspective, TWT risks a massive price correction in the days leading up to the year’s end.
At least two indicators are hinting at this bearish outlook. First, TWT’s weekly relative strength index (RSI) has become the most “overbought” since February 2021, suggesting a period of price consolidation or correction ahead.
TWT/USD weekly price chart. Source: TradingView
Second, TWT shows signs of upside exhaustion after hitting an ascending trendline resistance that capped the token’s upside attempts in 2021.
Historically, a pullback from the said resistance line has pushed TWT toward one multi-month ascending trendline support multiple times. In 2022, this rising level coincides with another horizontal support line at $0.878, down 60% from today’s price levels.
Related: Binance CEO urges crypto buyers to ‘hold’ amid ‘unpredictableness’
On a brighter note, TWT has flipped a multi-month horizontal trendline resistance near $1.535 as support during its ongoing price rally, which may help limit its bearish prospects. That said, a decisive rebound from $1.535 could have TWT price go for a new record high in late 2022 or early 2023.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
