WLFI's Political Probe and Price Collapse: A Flow Analysis

The immediate catalyst for WLFI's collapse is a formal U.S. House probe. A senior Democrat has launched an investigation into a reported $500 million deal giving an Abu Dhabi-connected entity a 49% stake in World Liberty Financial just before President Trump's inauguration. This inquiry, demanding detailed records, centers on national security risks and potential conflicts of interest, making it the dominant negative force for the token.

The market's reaction has been severe. WLFI has fallen 20% over the past week and is down 78% from its all-time high. This isn't just a correction; it's a sustained price collapse driven by the political overhang. The probe has triggered a flight from the asset, with large holders leading the exodus.

Distribution from these top non-exchange addresses has added direct selling pressure. Data shows they shed roughly 380 million WLFI tokens over the past week. At current prices, that's a distribution of more than $51 million in a single week. This rapid exit by major holders reflects heightened fear and amplifies the token's vulnerability to further declines.

The Liquidity and Volume Flow

Trading activity remains intense, but the flow is overwhelmingly bearish. WLFI maintains a high daily volume, ranking fourth in DeFi at $126 million. This liquidity provides a channel for selling pressure, not a sign of healthy interest. The market structure reveals extreme supply dilution: the token's market cap of $3.32 billion is dwarfed by its fully diluted valuation of $12.4 billion, a 280% premium that highlights the massive amount of tokens not yet in circulation.

Technically, the setup is clear. The price is trapped in a bearish channel, with a key support level at $0.113. A break below that zone is expected to accelerate the decline toward $0.07. Resistance is clustered between $0.18 and $0.20. A reversal would require a confirmed breakout above that zone with strong volume, a scenario that seems distant given the current political and distributional headwinds.

The bearish pressure is confirmed by technical indicators. The price is trading near the lower Bollinger Band and well below all major Exponential Moving Averages, which are acting as dynamic resistance. This confluence of factors-high volume feeding a downtrend, extreme dilution, and a clear technical breakdown path-defines the current market flow.

Catalysts and Key Levels to Watch

The immediate forward-looking event is the March 1 deadline for World Liberty Financial to respond to the House investigation. This is the first concrete catalyst that could move the needle. A delayed or non-responsive answer would likely deepen the political overhang and sustain selling pressure. Conversely, a clear, cooperative response might be the first step toward de-escalation, though it would not erase the market's fear.

Key technical levels define the near-term path. The most critical support is the $0.113 zone. A confirmed break below this level is expected to accelerate the decline toward $0.07. This is the bearish trigger point that would validate the current downtrend's continuation. Traders must watch for a sustained candle close below this level to signal the next leg down.

On the flip side, the key resistance to watch is above $0.143. A decisive move above this zone with strong volume would be required to signal that the overwhelming selling pressure has been absorbed. It would invalidate the immediate bearish thesis and could pave the way for a bounce toward the $0.18-$0.20 resistance cluster. For now, the flow remains overwhelmingly bearish, with the March 1 deadline adding a new layer of uncertainty to the setup.