Inside WLFI’s wild debut – Analyzing 130% gains and looming risks

Key Takeaways

WLFI jumped 130% from its ICO. But gave back 50%, triggering long-liquidations. Is this euphoria just a market-draining volatility shock?

World Liberty Financial’s [WLFI] launch kicked off with explosive price action. The token ripped nearly 130% to $0.48 in just five minutes, highlighting frenzied trading activity.

In fact, at one point, its Open Interest (OI) peaked at a record $1.03 billion, underscoring the aggressive leverage that drove the rally. The result? Its Market Cap jumped to a staggering $9.86 billion, landing WLFI in the top 20.

To put it in context, on day 1, about 24.6 billion WLFI were unlocked, or 24.6% of the total 100 billion supply. So, with 75.4 billion still locked, the real question is whether there’s enough depth to keep the bulls running.

WLFI kickoff tests risk appetite

WLFI’s price swings put market volatility back in the spotlight.

The launch drew in cross-market flows. It lifted Bitcoin’s [BTC] Market Cap 1.6% to $2.18 trillion. But just five minutes after hitting $0.48, WLFI retraced 22%, spiking short-term liquidations and profit-taking.

On-chain, three presale wallets moved 160 million WLFI ($52 million) to Binance, while nine new wallets shifted 321.4 million WLFI ($96 million) from the team’s Gnosis Safe to Bybit, highlighting early sell-side pressure.

Source: TradingView (WLFI/USDT)

The fallout? A liquidity frenzy. Nearly $500 million got liquidated in the past 24 hours, with longs taking 67.7% of the hit. WLFI alone saw $30 million wiped out in cascading liquidations.

Meanwhile, the TOTAL crypto Market Cap slid from a $3.77 trillion high to a monthly low of $3.64 trillion. That’s a staggering $130 billion pullback, highlighting broad risk-off flows hitting the market.

In short, WLFI’s launch shook up the crypto space. Early profit-taking, buying frenzies, and liquidation cascades were inevitable, but now the token’s true resilience is on the line.

Locked supply looms over bulls

WLFI closed day 1 at $0.25, wiping out 50% of its initial spike.

Similar to Official Trump [TRUMP], which blasted over 1,000% off of its ICO to $75 before collapsing under $10, WLFI faced early volatility and profit-taking, leading to a sharp pullback.

At press time, OI climbed to $955 million, up 22% from the previous day, signaling nearly $200 million of fresh leveraged positions hitting the market. 

Source: Coinglass

To dodge a TRUMP-style wipe out, WLFI needs to avoid getting trapped.

However, with its early price shakeup, a $5 billion Market Cap drop in 24 hours, heavy profit-taking, and leverage pouring in, it’s shaping up as a textbook TRUMP-style setup, putting the rally at risk if bulls can’t hold.

According to AMBCrypto, with 75.4 billion tokens still locked and set to hit circulation over time, WLFI’s 130% spike to $0.48 now reads as a euphoric surge that could easily feed into another volatility loop.