WLFI Token Price Slides Amidst Acute Liquidity Crisis
World Liberty Financial (WLFI) price declined about 3% to $0.0793 over the past 24h, hitting new all-time lows, primarily due to a project-specific liquidity crisis.
WLFI’s trajectory is currently dominated by a liquidity crisis and a loss of confidence stemming from its leveraged borrowing strategy.
The token moved in the opposite direction of Bitcoin, indicating severe internal pressure rather than broad market weakness.
The price dipped amid a controversial $75 million loan secured by WLFI collateral on Dolomite, sparking intense liquidation fears and a selloff.
Prominent investor Justin Sun faces over $11 million in paper losses as WLFI’s price dropped 15% in 24 hours. Approximately 545 million of his tokens are frozen due to a prior blacklist, preventing him from selling them. This compound selling pressure highlights acute liquidity risks for large holders.
Trading volume dipped 24% in 24 hours to $208 million at the time of reporting on Saturday. Also, the abrupt cancellation of a $427 million token unlock proposal accelerated selling and eroded investor confidence.
The treasury of World Liberty Financial deposited 5 billion WLFI tokens as collateral to borrow $75 million in stablecoins on the Dolomite DeFi platform.
This position now represents over 50% of Dolomite’s total value locked, creating a concentrated risk of forced liquidations if WLFI’s price falls further, according to the market report.
The project’s use of its own illiquid token as collateral created a dangerous feedback loop: price declines increased liquidation risk, prompting holders to sell.
Amid the loan controversy, insiders revealed that the team quietly scrapped a proposal to unlock $427 million in tokens for early investors. This unexpected move accelerated the selloff by disappointing holders and deepening uncertainty around future supply inflation.
Crypto analysts said the cancellation acted as a negative catalyst on top of existing fears, demonstrating poor communication and adding a large potential supply overhang.
The immediate trend is bearish, with the token deeply oversold. If WLFI fails to hold the $0.077 support, a drop toward $0.07 is likely. A short-term bounce could target $0.10, but a sustained recovery requires the team to decisively address the liquidity and leverage concerns.
Bearish Pressure WLFI’s decline is a clear case of project-specific risk overwhelming broader market trends, driven by a high-stakes leverage strategy and poor tokenomics communication. XRP Soars as Ripple Highlights Interest in Africa Crypto Payment
