- WLFI dropped 12% after heavy selling and collateral borrowing concerns emerged.
- On-chain activity and liquidity stress raised fears about protocol stability and withdrawals.
- Technical indicators show bearish momentum with key support levels under pressure.
World Liberty Financial — WLFI, came under heavy selling pressure as market confidence weakened sharply across trading sessions. The asset dropped nearly 12% within 24 hours, pushing price to around $0.0818 and marking its lowest level since launch in 2025. Weekly losses widened to 15%, while monthly performance slipped further to 17%. Traders reacted quickly as momentum faded, and charts turned increasingly bearish. The sell-off intensified after concerns emerged around liquidity management and borrowing activity linked to the project’s treasury operations.
Collateral Moves Trigger Market Concerns
Attention shifted to on-chain activity after reports revealed large-scale borrowing backed by WLFI tokens. CoinDesk reported that World Liberty Financial deposited billions of governance tokens into the Dolomite lending protocol as collateral. Against this position, the project borrowed tens of millions of dollars in stablecoins, including USDC and USD1. On-chain data from Arykham confirmed a wallet collateralized around five billion WLFI tokens, generating roughly $75 million in borrowed funds.
Shortly after, more than $40 million of those funds moved to Coinbase Prime, raising further questions among market observers. The borrowing activity pushed Dolomite’s lending pool to full utilization, temporarily restricting withdrawals for other depositors. This development added pressure to sentiment, as traders worried about liquidity stress within the protocol. World Liberty Financial responded on X, dismissing criticism as FUD and stating that liquidation risk remains distant.
Despite this reassurance, concerns persisted due to advisory ties between the project and Dolomite co-founder Corey Caplan, which some analysts flagged as a potential conflict of interest. Additional pressure came from the project’s own buyback activity. WLFI disclosed spending $65.58 million to purchase 435.3 million tokens at an average price of $0.1507.
RSI Signals Weak Momentum and Key Support Levels
Investor exposure also came into focus after Tron founder Justin Sun saw significant losses tied to WLFI holdings. Reports suggest Sun originally invested $30 million, later expanding exposure toward $75 million. A portion of his tokens remains frozen following wallet restrictions, leaving an estimated 545 million WLFI tokens valued near $45 million.
Market structure continues to lean bearish as technical indicators confirm weakening momentum. The RSI hovers near 30, placing WLFI close to oversold territory. MACD readings also show sustained downward pressure, suggesting sellers remain in control. Immediate support sits near $0.079, a level traders are closely watching for stability.
If that support fails, downside targets extend toward $0.075 and $0.070, where deeper liquidity pockets may attract price action. Despite oversold conditions, buyers have yet to step in with enough strength to reverse the trend. Market participants remain cautious, waiting for clearer signs of accumulation before expecting any meaningful recovery in WLFI price direction.
