Swell [SWELL], the native digital currency of Swell Networks, the latest liquid staking platform on the Ethereum [ETH] network, surged by 60% on February 10th.
This spike in value came following SWELL’s listing on two new centralized exchanges, Bitget and Gate.io. As of the current moment, the cryptocurrency’s trading volume has increased by 200%, signaling a strong interest from traders.
Despite these positive developments, Swell’s price failed to break out of its downward trend channel that was established back in December. Consequently, the altcoin faced resistance at $0.02 and retraced some of its recent gains up to this point.
Is a Trend Reversal Possible?
After reaching $0.07 in December, SWELL experienced a significant drop of around 80% in its valuation. This decline was not unique to SWELL, as numerous other altcoins also witnessed considerable losses ranging from 20% to 90% due to various factors like the Trump tariffs disputes and concerns over inflation.
Although the coin seemed to find support near $0.01 in February and witnessed a 60% increase in value from that level, a sustainable recovery might be challenging without breaking the current downtrend.
In simpler terms, SWELL could potentially decrease further towards the $0.01 support level or even drop to the middle range. Conversely, a substantial breakout above the downtrend could propel SWELL towards $0.027 or even $0.035.
Sign of Strong SWELL Accumulation
Interestingly, despite the 80% decrease in its value, SWELL has been steadily accumulating over the past two months. More than 100 million SWELL tokens have been transferred from exchanges during this period, as indicated by the growth of supply outside exchanges (yellow).
Moreover, the overall selling pressure has decreased over the same timeframe. Recent data shows a further decline in selling pressure from centralized exchanges, represented by the red line (Supply on Exchanges).
This accumulation trend could partly elucidate why the digital currency found support at $0.01.
Despite the positive accumulation trend and reduced supply pressure, there is one notable concern associated with SWELL.
According to CoinMarketCap, over 90% of the token’s supply is in the hands of the top 10% holders, implying the potential for price manipulation by a select few.
Disclaimer: The views expressed in this article are the personal opinions of the author and should not be considered as financial, investment, or trading advice.