Trust Wallet Token (TWT) Price: Rally or Red Flag?
TWT Price Rally Faces Scrutiny After Profit-Taking Surge
Trust Wallet Token (TWT) experienced a volatile ride, peaking at $1.33 before correcting to around $1.10. While still up 37% in the last 24 hours, the initial surge, linked to commentary from Binance's CZ, is now under scrutiny. Technical analysis reveals a pre-existing breakout pattern fueled the rally, but subsequent profit-taking raises concerns about its sustainability.
Breakout and Profit-Taking: A Closer Look
The TWT price exhibited an inverse head-and-shoulders pattern on the 2-day chart, a setup often indicative of a reversal with a clear price target. The rally, amplified by CZ's tweet, quickly reached its target above $1.17. This triggered a wave of profit-taking, as evidenced by a significant shift in exchange net flows.
Key observations:
- Exchange net flows flipped from -177,980 TWT to +2.84 million TWT within two days, a 1,600% increase in tokens deposited.
- This indicates a rush to secure gains, creating immediate selling pressure.
Whale Activity Adds to Concerns
Unlike scenarios where whale accumulation offsets retail selling, large TWT holders (wallets with 10 million–100 million TWT) have been reducing their positions since early September. Their holdings decreased from 248.9 million to 241.4 million TWT, a substantial sell-off even before the retail surge.
This suggests a lack of strong support to absorb the current selling pressure.
Bearish Divergence: Long-Term Caution
Despite the short-term gains, long-term technical indicators present a cautious outlook. A hidden bearish divergence has formed since December 2024, where TWT's price made lower highs while the Relative Strength Index (RSI) made higher highs. This suggests weakening momentum and a potential continuation of the broader downtrend.
Key Price Levels to Watch
Critical support levels to monitor include $1.00, $0.84, and $0.71. A break below $0.71 could lead to further losses, targeting $0.63. Conversely, a sustained daily close above $1.42 (ideally $1.63) would negate the bearish signals.
Conclusion
The TWT price rally appears to be primarily driven by a technical breakout and subsequent profit-taking. While holding above $1.00 is crucial, the combination of whale selling and bearish divergence suggests caution. Developers looking to build secure applications on the Trust Wallet ecosystem should prioritize robust security audits. Platforms like Codeum can provide essential security assessments and smart contract development support to ensure the safety and reliability of decentralized applications.