WLFI Price Drops After USD1 Shock — Can $35 Million In Whale Buying Trigger Recovery?

World Liberty Financial (WLFI) is down nearly 8% over the past 24 hours, showing weakness after the USD1 shock. The Trump-Family-linked stablecoin weakening triggered panic across the ecosystem, and its effects on the WLFI price are still lingering.

This drop comes at a critical time because WLFI had been building a bullish breakout pattern. Now, with whales buying and selling pressure fading, the token sits at a decisive point.

Mar-A-Lago Rally Fades As USD1 Shock And RSI Divergence Trigger WLFI Pullback

WLFI’s recent volatility began with the Mar-A-Lago crypto event. Between February 16 and February 18, the price surged 32%. This rally formed the cup portion of a cup-and-handle pattern, which is a bullish setup where price bounces, pauses, drops, and then attempts a breakout.

However, warning signs appeared before the drop.

The Relative Strength Index (RSI), which measures momentum strength on a scale from 0 to 100, started rising between February 3 and February 18 even as WLFI’s broader trend remained weak. This created a hidden bearish divergence.

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Hidden bearish divergence happens when momentum rises, but price fails to confirm strength. It often signals that a rally may fail and lead to a pullback.

That pullback intensified after WLFI’s stablecoin, USD1, briefly weakened, possibly due to a coordinated attack.

Following this shock, WLFI dropped about 17%, forming the handle portion of its pattern and erasing most of its recent gains. But the decline was not driven by broad investor selling, which is usually the case after such a sentimental trigger.

Leverage Flush And $35 Million Whale Buying Reveal Hidden Accumulation

The sharp drop was closely tied to leverage liquidation rather than long-term investors exiting.

Leverage allows traders to borrow money to increase position size. The funding rate shows whether leveraged traders are betting on price increases or declines. By February 18, when the WLFI price peaked amid positive Mar-A-Lago sentiment, open interest surged to nearly $245 million.

After February 18, WLFI’s funding rate turned negative while open interest dropped sharply.

This combination confirms a leverage flush. A leverage flush happens when bullish positions are forcibly closed, causing rapid price declines without real selling from long-term holders.

At the same time, whales began buying.

The largest WLFI holders, wallets holding over 1 billion tokens, increased their holdings from 8.23 billion to 8.56 billion WLFI starting February 19. This means they accumulated about 330 million WLFI. At current prices, that equals roughly $35 million in buying.

This accumulation happened while the price was falling, which usually signals confidence in future recovery. It also takes the blame away from spot dumping.

Retail selling also appears to be slowing. Exchange inflows, which measure how many tokens investors send to exchanges to sell, dropped sharply. On February 19, inflows were 128 million WLFI. They have since fallen to just 8.9 million WLFI, down almost 93%. Lower inflows suggest fewer investors are trying to sell.

Together, these signals show the World Liberty Financial token’s price drop was largely driven by liquidations rather than true investor exit.

Sentiment Recovers, But Critical WLFI Price Levels Now Surface

Investor sentiment also reflects this shift. Positive sentiment around WLFI had already been falling earlier this month as prices declined. It briefly recovered during the Mar-A-Lago rally but dropped again after the USD1 shock.

Since February 22, sentiment has started rising again from near zero levels. This recovery shows confidence is stabilizing as panic fades.

However, sentiment remains far below earlier highs seen in early February, around 21, and during the recent Mar-A-Lago rally, where the score hit 11. This mixed sentiment now reflects directly in WLFI’s price structure.

WLFI now sits at a critical technical level. To confirm a breakout, not just a recovery, the price must move above $0.125. This level represents the neckline of the cup-and-handle pattern. Breaking above it would confirm strength and could push WLFI toward $0.166 and possibly $0.200 if buying continues.

However, downside risks remain. If WLFI falls below $0.101, the pattern would weaken significantly. A drop below $0.095 would invalidate the bullish setup completely and signal deeper downside.

For now, WLFI’s recent drop appears to be driven more by leverage liquidations than by true selling.

Whale accumulation and falling exchange inflows show strong hands are still positioning. Whether this Trump-Family-linked token breaks out or breaks down now depends on whether buyers can reclaim key resistance and restore confidence after the USD1 shock.

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