Assessing World Liberty Financial after 235mln WLFI exchange transfer

After World Liberty Financial dropped to a low of $0.15, the altcoin rebounded to a high of $0.18, then retraced towards $0.16.

As of this writing, World Liberty Financial [WLFI] traded at $0.1641, down 6.21% on the daily charts. Before this slip, WLFI had been on an upward trajectory, rising by 2.56% on the weekly charts. 

This volatility to the upside has created a favorable environment for market participants to make strategic moves.

World Liberty Financial moves 250 million

According to Onchain Lens, World Liberty Financial deposited 235 million WLFI, worth $40.63 million, into Binance.

This team’s wallet has not made any deposits into Binance since WLFI was launched, signaling a major market shift. Following the transfer, the team wallet still holds $1.7 billion worth of WLFI, according to Arkham data. 

Source: Arkham

In many cases, such a massive move indicates the market is preparing for market-making or liquidity.

For instance, one crypto analyst, 0xShonkovich, suggested that the transfers are likely an airdrop for USD1 holders since the program is expected to run for 4 weeks.

Despite that, holders and traders could interpret the transfers as bearish. As a result, market participants panic-sell even before the news is confirmed, creating significant sell pressure.

Selling pressure on the rise again

On the 25th of January, buyers stepped into the market aggressively to defend $0.17 levels, but their efforts proved futile, as WLFI closed at a lower low.

This sentiment shifted drastically on the 26th of January, with participants across the market flipping bearish. As a result, the altcoin’s Spot Netflow turned positive, climbing to $5.18 million, a significant jump from -$2.33 million.

Source: CoinGlass

When this metric turns positive, it suggests that most traders increased their exchange deposits, a sign of increased selling.

Coupled with that, World Liberty Financial Top Holders increased outflows, offloading 254.9 million tokens compared to 240 million in inflows. As a result, the balance change turned negative, dropping to -14 million, suggesting increased selling from the group.

Source: Nansen

Historically, higher selling activity across market participants has accelerated downside momentum, leading to lower prices.

What’s next for WLFI?

World Liberty Financial’s weakness returned to the market after the team transferred WLFI into exchanges. As a result, the altcoin’s Relative Strength Index (RSI) fell into the bearish zone after it formed a bearish crossover the previous day.

As such, RSI dropped to 47, which suggested that sellers stepped into the market, as noted earlier. At the same time, its Stochastic Momentum Index (SMI) dropped from 13 to 4.4, indicating strengthened downside momentum.

Source: TradingView

With these momentum indicators dropping to such areas, they suggested weakened upside momentum, with buyers displaced from the market.

Such market conditions leave WLFI vulnerable and could lead to further losses. If it happens, with sellers increasing spending, WLFI will seek support around $1.5.

However, if the market neutralizes the team’s transfers, WLFI will seek to reclaim $0.17 and target $0.19 in the short term.

Final Thoughts

• World Liberty Financial deposited 235 million WLFI, worth $40.63 million.
• WLFI declined 6.2% to a low of $0.1602 after investors flipped bearish and panic sold.