Why Is Trump Backed WLFI Price Dumping Today?

The Trump family-backed World Liberty Financial (WLFI) price tumbled sharply over the past 24 hours despite broader crypto market gains. The token dropped 10% to $0.0818, extending weekly and monthly losses significantly. 

In the last week, WLFI lost 15%, and monthly losses are 17%. The crash is against the backdrop of an upward movement due to a two-week ceasefire agreement between the United States and Iran. 

The broader crypto market increased by 0.67% to 2.43 trillion in the process. Bitcoin price remained above $71,000, and Ethereum price surged past $2,100 with consistent inflows. Analysts attribute WLFI’s slide to panic surrounding a controversial insider-linked borrowing structure.

WLFI Price Drops 10%- What Triggered the Sudden Sell-Off?

WLFI price dropped as mounting concerns weighed heavily on investor confidence across the broader crypto market.

The fall came right before a massive unlocking of tokens, which is likely to increase the supply of the asset in circulation.

Arykham data platform blockchain records that a project wallet collateralized with 5 billion WLFI tokens to Dolomite. This collateral has taken the shape of about $75 million borrowed stablecoins, such as the USDC and the USD1 project token.

Soon after, over $40 million of borrowed money transferred to Coinbase Prime, which attracted the attention of analysts in a short period. This transfer was made several hours following President Donald Trump proclaiming a U.S.-Iran ceasefire pact.

World Liberty Price Slides Amid Collateral Concerns

On-chain metrics indicate the large WLFI position pushed Dolomite’s lending pool to full utilization capacity. This led to a short-term restriction of depositors to retrieve their provided assets.

Want an indepth analysis of the crypto market- Click here to access Coingape’s Q1 market report. 

According to market watchers, the structure has a concentration of exposure among a small network of market participants. Other commentators refer to the practice as a high-gear treasury policy as opposed to normal liquidity management. Volatility continues to be a concern with investors balancing liquidity risks and the impending token unlock, despite the response.

How Low Will WLFI Price Go This Week?

World Liberty Financial token extended its decline as selling pressure intensified across major exchanges. The traded at slightly below $0.083 following the loss of key intraday support levels. The price action depicts a clear break out of the resistance zone of $0.10.

The nearest support is at $0.079, the recent swing low. A failure below this level can open the area of $0.075. Once bearish pressure increases at a higher rate, the following down target will be close to $0.070.

On the positive side, the attempts at recovery are met with resistance at around $0.085. A continued rise beyond this mark may pave way to $0.090. Further bullish confirmation would need a re-taking of the zone of $0.10.