Coinone Issues TWT Warning Amid Extreme Fear Market

• South Korean exchange Coinone issues investment warning for Trust Wallet Token (TWT)
• Warning cites security vulnerability confirmed through official Trust Wallet channels
• Global crypto sentiment hits Extreme Fear (20/100) as Bitcoin trades at $88,711
• Market structure suggests potential liquidity grab below key TWT support levels

VADODARA, December 26, 2025 — South Korean cryptocurrency exchange Coinone has issued an investment warning for Trust Wallet Token (TWT), citing potential increased price volatility following identification of a security vulnerability within the Trust Wallet service. This daily crypto analysis examines the technical implications as global market sentiment registers Extreme Fear with Bitcoin trading at $88,711, up 1.07% in 24 hours.

Market Context & Background

Exchange warnings typically precede significant volatility events. The South Korean market represents approximately 8% of global crypto trading volume, making regulatory actions from major exchanges like Coinone particularly impactful. This mirrors the 2021 pattern where exchange delistings triggered cascading liquidations across correlated assets. Market structure suggests institutional players are positioning for a potential liquidity grab below key psychological levels.

Related developments in the current Extreme Fear environment include Bitcoin's struggle to maintain its $89,000 breakout level and recent $116 million futures liquidation events that have increased market fragility.

What Happened?

On December 26, 2025, Coinone announced an investment warning for Trust Wallet Token (TWT) through official exchange channels. The warning specifically cited "potential for increased price volatility" after a security vulnerability was identified within the Trust Wallet service. According to the announcement, the vulnerability confirmation came through "the foundation's official community channels."

Coinone did not specify whether trading restrictions would follow, but historical precedent suggests warnings often precede reduced leverage availability or margin requirement increases. The exchange operates under South Korea's Financial Services Commission (FSC) regulations, which mandate risk disclosures for assets with identified security concerns.

Technical Analysis & Price Action

TWT's price action shows clear signs of distribution above the $1.20 level. The 200-day moving average at $1.05 represents critical support. RSI readings have diverged bearishly since December 20, indicating weakening momentum despite nominal price stability.

Volume profile analysis reveals significant accumulation between $0.85 and $0.95, creating a potential Fair Value Gap (FVG) that could be filled if selling pressure intensifies. The $1.15 level represents a key order block where institutional selling previously emerged.

Bullish invalidation: A sustained break below $0.85 would invalidate the current consolidation structure and target the $0.72 Fibonacci support level derived from the 2024-2025 rally.

Bearish invalidation: A reclaim of $1.25 with accompanying volume would negate the current warning's technical impact and suggest the vulnerability has been adequately addressed.

By The Numbers

Why It Matters

For institutional investors, exchange warnings create immediate risk management requirements. Portfolio rebalancing typically follows, with reduced exposure to correlated assets. The Trust Wallet vulnerability raises broader questions about self-custody security standards, particularly following EIP-4844's implementation which increased wallet complexity.

Retail traders face immediate margin call risks if exchanges implement leverage reductions. Historical data indicates warning announcements trigger 15-25% volatility spikes in the affected asset within 72 hours. The Extreme Fear sentiment amplifies these effects through reduced liquidity and heightened risk aversion.

Community Sentiment

Market analysts on X/Twitter note the timing coincides with broader regulatory scrutiny. "Exchange warnings during Extreme Fear periods typically precede capitulation events," observed one quantitative researcher. Another commented, "The Trust Wallet vulnerability confirmation through official channels suggests this isn't FUD—there's actual technical risk."

Bulls argue the warning creates a potential gamma squeeze setup if short positions become overcrowded. Bears counter that security vulnerabilities in fundamental infrastructure represent systemic risk that outweighs technical setups.

Price Prediction / Future Outlook

Bullish Case: If the vulnerability is patched within 48 hours and Coinone doesn't implement trading restrictions, TWT could reclaim $1.25 as shorts cover. The Extreme Fear sentiment would then represent a contrarian opportunity, with a move toward $1.40 possible if Bitcoin maintains its $88,000 support.

Bearish Case: If additional exchanges issue similar warnings or the vulnerability proves exploitable, TWT could test the $0.72 Fibonacci level. A break below $0.85 would likely trigger stop-loss cascades, particularly in the current low-liquidity environment. Correlation with broader altcoin weakness would accelerate declines.

FAQs

What does an investment warning mean?Exchange investment warnings indicate identified risks that could affect asset prices. They often precede trading restrictions or margin requirement changes.

How does Extreme Fear sentiment affect price action?Extreme Fear (20/100) typically correlates with reduced liquidity and increased volatility. It can signal capitulation bottoms or accelerate declines depending on catalyst direction.

What security vulnerability was identified?Coinone's announcement didn't specify technical details but confirmed the vulnerability through Trust Wallet's official channels. Market structure suggests wallet-related rather than token-contract issues.

Will other exchanges follow Coinone's warning?Historical precedent shows regional exchanges often coordinate on risk disclosures. Global exchanges may implement similar measures if vulnerability confirmation spreads.

How does this affect Bitcoin and Ethereum?Direct impact is limited, but sentiment contagion can affect broader market liquidity. Infrastructure vulnerabilities raise systemic questions that could temporarily pressure all crypto assets.

Source Note: Market data and factual reporting in this article are sourced from original reports. Commentary and analysis provided by CoinMarketBuzz.