The cryptocurrency market is known for its volatility, but some assets are flashing warning signals that even the most optimistic trader should take note of.
World Liberty Financial ($WLFI) has been hit hard by recent research revealing that the project used its own token as collateral to borrow $75 million in stablecoins on the Dolomite lending platform. This move tied 5 billion $WLFI tokens (about 5% of the total supply) to a risky leveraged position, creating a self-inflicted liquidity crisis.
The weekly chart for WLFIUSD shows that it is trading in a bearish channel with the Parabolic SAR sitting firmly above price. The RSI Divergence Indicator indicates deeply oversold readings, but multiple lower highs have marked every recent rally attempt, suggesting any bounce will likely be sold into.