Decoding WLFI’s meltdown – Can a $7mln buyback undo a $190mln dump?

Key Takeaways

What triggered WLFI’s 25% fall?

A $190 million sell-off and sharp Open Interest decline to $300 million fueled cascading long liquidations.

What’s WLFI’s next technical setup?

Liquidation clusters around $0.13 mark as key resistance; recovery depends on renewed spot demand and short-covering momentum.

The market decline in the past day didn’t spare World Liberty Finance [WLFI].

WLFI dropped by 25%, leaving most investors underwater and prompting one major holder to cash out $190 million.

Although a rebound attempt was underway at the time of writing, traders were yet to respond. AMBCrypto details what to expect from World Liberty Finance.

WLFI’s dual market sell-off

WLFI’s fall wasn’t taken lightly across the market. In fact, the last 24 hours saw alignment between Spot and Derivative investors, both contributing to the downturn.

Over the past 24 hours, Open Interest declined sharply to about $300 million, with around $150 million exiting centralized perpetual exchanges. Such large outflows often set short-term direction.

Source: CoinGlass

At the same time, long liquidations of $47 million far outweighed the $7.8 million in short liquidations, confirming that bears were taking control of the market.

Spot traders joined the retreat as roughly $6 million worth of WLFI was offloaded to limit exposure.

Attempted market recovery

Attempts were made in the past day to save  from further decline, as the team behind the token launched a buyback.

Following the drop, Lookonchain tracked that $7.15 million was used to purchase an additional 55.69 million WLFI.

Shortly after the purchase, the company recorded a $2.85 million loss on its books as the price continued to slide on the chart.

Source: Lookonchain

This move from the team did not alter the community’s stance toward the altcoin. In fact, beta followers voted against purchasing WLFI.

According to the latest community sentiment data on CoinMarketCap, between the 5th and the 11th of October, investors’ bullish sentiment dropped from 82% to 67%, showing a clear decline in interest.

A continued lack of enthusiasm could further deepen the bearish outlook for WLFI, with more losses potentially on the way.

What’s next for WLFI

The chart showed two possible directions for price movement at press time.

CoinGlass’ Liquidation Map indicated that WLFI could tilt either upward or downward, as liquidity clusters around the $0.13 mark appear balanced.

Source: CoinGlass

WLFI’s next move hinges on market momentum. Continued bearish pressure could push the token lower before any recovery attempt.

Unless demand revives across spot and futures markets, WLFI may remain in a correction phase through the coming sessions.