Home » FTX collapse is Trust Wallet Token’s gain — Why did TWT price soar 150% in six days?

FTX collapse is Trust Wallet Token’s gain — Why did TWT price soar 150% in six days?

by admin

Trust Wallet Token (TWT) surged nearly 150% over the past 6 days, net capital Nearly $100 Billion Crash in the same period.

TWT Whale Accumulation Gains Momentum

The price of TWT reached an intraday high of $2.43 on November 15, a day after hitting a record high near $2.75. At its 2022 low, the token is trading at $0.40 and has gained more than 225% year-to-date, making it one of the best performing assets of the year.

TWT/USD weekly chart.Source: Trading View

The upward trend of Trust Wallet tokens gained momentum in November. Sam Bankman-Fried’s FTX Collapseprompts bank execution status, traders can withdrew their funds From high volume exchanges.

For example, the total number of Bitcoins (Bitcoin) dropped to zero in the week ending November 13. Similarly, exchange Ether (ethereum) reserves fell from 611,000 to just 2,800 over the same period.

Ethereum balance on FTX.Source: Glassnode

Distrust of centralized exchanges Increased demand for self-custody walletsBinance CEO Changpeng Zhao’s endorsement of the token’s parent platform, Trust Wallet, also played a major role in the rise in TWT price.

Additionally, the supply rate of Trust Wallet tokens held by addresses with balances between 1,000 TWT and 10 million TWT tokens surged during the 6-day price uptrend, suggesting a whale stockpile.

Trust Wallet Token supply distribution among wallets holding 1K-10M TWT.Source: Santimento

Meanwhile, the trading volume of the token surged from 279 million TWT to 593.25 TWT over the same period, demonstrating the market’s confidence in the uptrend.

Daily trading volume (TWT) of Trust Wallet tokens.Source: Santimento

TWT will serve as a utility token for Trust Wallet and can be bought, sold and collected by traders. Non-Fungible Token (NFT), and exchange and stake cryptocurrencies. As a result, TWT typically acts as a centralized exchange token, while Trust Wallet allows users to manage their funds.

As such, Trust Wallet emerged as an off-ramp for traders withdrawing funds from cryptocurrency exchanges following the FTX fiasco, and TWT prices may have risen accordingly.

“Overbought” Risk of Trust Wallet Tokens

From a technical point of view, TWT is at risk of a significant price correction in the days leading up to the end of the year.

At least two indicators point to this bearish outlook. First, TWT’s Weekly Relative Strength Index (RSI) is the most ‘overbought’ since February 2021, suggesting a price correction or correction is coming.

TWT/USD weekly chart.Source: Trading View

Secondly, TWT is showing signs of upside exhaustion after reaching resistance at the uptrend line that has limited the token’s upward attempts in 2021.

Historically, pullbacks from the above resistance lines have pushed TWT towards single multi-month uptrend line support many times. In 2022, this ascending level will meet another horizontal support line at $0.878, a 60% drop from the current price level.

Related: Binance CEO Urges Crypto Buyers to “Hold” Amid “Unpredictability”

On a brighter note, TWT has reversed multi-month horizontal trendline resistance near $1.535 as support during the ongoing price rally. That said, a decisive rally from $1.535 could push TWT price to new all-time highs in late 2022 or early 2023.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and trading movements involve risk. You should do your own research when making a decision.