Trust Wallet Token (TWT) is up nearly 150% over the past six days, bucking the slide in the crypto market, whose net capitalization has dropped by nearly $100 billion over the same period.
TWT whale accumulation gains momentum
On November 15, TWT price reached a high of $2.43, a day after setting an all-time high at around $2.75. At its lowest in 2022, the coin was changing hands for $0.40, making it one of the best performing assets of the year with a year-to-date gain of over 225%.
The trust wallet token’s uptrend gained momentum in November after the collapse of Sam Bankman-Fried’s FTX triggered a bank run, in which traders pulled their funds from exchanges.
For example, the total number of bitcoin (BTC) in FTX’s wallet dropped to zero in the week ending November 13. Similarly, the exchange’s Ether (ETH) reserves dropped from 611,000 to just 2,800 during the same period.
It seems that distrust in centralized exchanges has increased the appetite for self-custody wallets. Binance CEO Changpeng Zhao’s support for the token’s parent platform Trust Wallet has also played a major role in boosting 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 of between 1,000 TWT and 10 million TWT tokens increased during the six-day price uptrend, suggesting whale accumulation.
Meanwhile, the trading volume of the token has increased from 279 million TWT to 593.25 TWT in the same period, demonstrating the firm belief in its upward movement in the market.
TWT serves as a utility token for the Trust Wallet, in which traders can buy, sell and collect 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 is 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 the TWT price rallying in response.
‘Not your keys, not yours #crypto‘ has been echoing in the Twitter space for the past few days.
While many people use centralized exchanges, many users have yet to harness the power of self-custody.
Start taking control, today https://t.co/h3pVVNzgpL– Trust – Crypto Wallet (@TrustWallet) 11 November 2022
Rely on the “overbought” risk of wallet tokens
From a technical perspective, TWT risks a massive price correction in the coming days towards the end of the year.
At least two indicators are pointing to this bearish outlook. First, the weekly Relative Strength Index (RSI) of TWT has turned “overbought” to its most since February 2021, suggesting a period of further price consolidation or a correction.
Second, TWT is showing signs of exhaustion on the upside after hitting a rising trendline resistance that limited the coin’s upward efforts in 2021.
Historically, pullbacks from the said resistance line have pushed TWT to a multi-month rising trendline support several times. In 2022, this rising level coincides with another horizontal support line at $0.878, a 60% downside from today’s price levels.
RELATED: Binance CEO urges crypto buyers to ‘hold on’ amid ‘unpredictability’
On a brighter note, TWT flipped a multi-month horizontal trendline resistance near $1.535 to act as support during its ongoing price rally, which could help limit its bearish prospects. That said, a decisive bounce off $1.535 could propel TWT price to a new all-time 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 do your own research when making a decision.