Key Takeaways
WLFI has seen massive liquidity outflows in the past day, driven by derivative investors, as overall trading volume declines. The asset could face further outflows as sentiment weakens.
World Liberty Finance [WLFI] has been on a downtrend over the past day, leading the market decline with a 9.9% drop.
Liquidity outflows remain the major driver of the decline, with short traders taking profit while longs bear the heat.
Derivatives drive WLFI down
The recent decline in WLFI, analysis shows, has been driven by derivative investors. Open Interest data indicated an outflow of $139 million in the past day, following a 20% drop.
This type of outflow from the derivatives market suggests investors are deliberately closing positions as they see the market as highly volatile and want to avoid liquidation risks.
Source: CoinGlass
At the same time, overall trading volume has seen a steep decline. Volume dropped by $994 million in the past day, down to $5.14 billion.
When price and volume decline simultaneously, it signals weak momentum in the market and raises the likelihood of further price drops in upcoming sessions.
Longs suffer the most
Investor activity has leaned bearish. Press-time data showed that longs have taken the brunt of liquidations.
Of the total $19.05 million liquidated, longs accounted for $15.05 million, while shorts represented just $4.79 million, showing that shorts remain more profitable.
On-chain sentiment reflected the same. According to Lookonchain, one whale holding a short position gained $2.2 million on WLFI, while a long whale lost $1.8 million over the same period.
Source: CoinGlass
In the spot market, sentiment initially leaned bullish, but that optimism has faded under bearish pressure.
For context, accumulation reached $6.5 million around 5:00 AM (UTC+1) but has since plunged to $456,280 at press time, suggesting that earlier buyers have slowed down significantly.
AMBCrypto reviewed the asset’s chart and found that WLFI could soon continue into a price discovery phase.
WLFI enters price discovery
The chart looks bearish after WLFI failed to hold the $3.23 support level on Thursday, forcing the token into a price discovery phase.
Price discovery is essentially a phase where an asset keeps setting new targets.
In this case, however, the movement favors bears, suggesting WLFI could continue to trend lower unless there is a significant bullish inflow supporting long positions.
Source: TradingView
For now, traders have made their stance clear. Sentiment remains bearish, outflows are rising, and spot funding has dropped sharply—bullish investors should brace for more pressure.
