Swansea travelled to Spain and were superb in beating Valencia 3-0 on Thursday in the Europa League, and had just two days to recover before going to south London.
Holloway is hoping that will give the Eagles an advantage but still expects a tough afternoon against Michael Laudrup's men.
"I am glad we have a couple more days than Swansea to prepare, we have some fantastic options in the squad," he said.
"They were playing on Thursday, not thinking about us, whereas we were thinking about them, and we have to make sure we take advantage of that.
"Swansea are an excellent side. Having watched them during my time commentating you can see how well they pass, attack and move the ball.
"They will have a lot of possession, they will look to play it around and I am looking forward to dealing with that challenge. I cannot wait for Sunday to go up against it."
Holloway is confident Palace are improving after a stuttering start to the season.
"I'll be looking at sitting in, counter-attacking and trying to hurt teams. There won't be too many better than us at parking the bus across the goal," he said.
"But I have also got to get those counter attacking instincts back. We're showing signs of growing, getting better and improving and putting all of the elements together."